REPORT on the draft general budget of the European Union for the financial year 2007
16.10.2006 - (C6‑0299/2006 – 2006/2018(BUD))and Letter of amendment No 1/0000 (00000/2006 - C6-0000/2006) to the draft general budget of the European Union for the financial year 2007
Section III – Commission
Committee on Budgets
Rapporteur: James Elles
- MOTION FOR A EUROPEAN PARLIAMENT RESOLUTION
- EXPLANATORY STATEMENT
- OPINION of the Committee on Foreign Affairs
- OPINION of the Committee on Development
- OPINION of the Committee on International Trade
- OPINION of the Committee on Economic and Monetary Affairs
- OPINION of the Committee on Employment and Social Affairs
- OPINION of the Committee on the Environment, Public Health and Food Safety
- OPINION of the Committee on Industry, Research and Energy
- OPINION of the Committee on Transport and Tourism
- OPINION of the Committee on Regional Development
- OPINION of the Committee on Agriculture and Rural Development
- OPINION of the Committee on Fisheries
- OPINION of the Committee on Culture and Education
- OPINION of the Committee on Civil Liberties, Justice and Home Affairs
- OPINION of the Committee on Constitutional Affairs
- OPINION of the Committee on Women's Rights and Gender Equality
- DECISIONS TAKEN BY THE COMMITTEE ON BUDGETS ON THE DRAFT AMENDMENTS AND PROPOSED MODIFICATIONS
- PROCEDURE
MOTION FOR A EUROPEAN PARLIAMENT RESOLUTION
on the draft general budget of the European Union for the financial year 2007, Section III – Commission (C6‑0299/2006 – 2006/2018(BUD)), and Letter of amendment No 1/0000 (00000/2006 - C6-0000/2006) to the draft general budget of the European Union for the financial year 2007
The European Parliament,
– having regard to Article 272 of the EC Treaty and Article 177 of the Euratom Treaty,
– having regard to Council Decision 2000/597/EC, Euratom of 29 September 2000 on the system of the European Communities' own resources[1],
– having regard to Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial Regulation applicable to the general budget of the European Communities[2],
– having regard to the Interinstitutional Agreement of 17 May 2006 between the European Parliament, the Council and the Commission on budgetary discipline and sound financial management[3],
– having regard to the Interinstitutional Agreement of 6 May 1999 between the European Parliament, the Council and the Commission on budgetary discipline and improvement of the budgetary procedure[4]4,
– having regard to its resolution of 18 May 2006 on the Commission's Annual Policy Strategy report (APS)[5]5,
– having regard to the preliminary draft general budget of the European Union for the financial year 2007, which the Commission presented on 3 May 2006 (SEC(2006)0531),
– having regard to the draft general budget of the European Union for the financial year 2007, which the Council established on 14 July 2006 (C6-0299/2006),
– having regard to Letter of amendment No 1/0000 (00000/2006 - C6-0000/2006) to the draft general budget of the European Union for the financial year 2007,
– having regard to the report of the Committee on Budgets of 11 July 2006 on the mandate for the 2007 draft budget conciliation procedure for the Council's first reading,
– having regard to Rule 69 and Annex IV of its Rules of Procedure,
– having regard to the report of the Committee on Budgets and the opinions of the other committees concerned (A6-0358/2006),
General considerations: setting priorities, value for money, preparing for the 2008/ 2009 review
1. Recalls that its political priorities for the 2007 budget were set out in its abovementioned APS resolution of 18 May 2006; notes that paragraph 5 of that resolution set out the three key elements of setting policy priorities, ensuring qualitative value for money, and preparing for the 2008/ 2009 review of the 2007-2013 multi-annual financial framework (MFF);
2. Notes that this strategy has been put into effect in preparing the Parliament's first reading on the 2007 budget with policy priorities set out in paragraph 6 of the APS resolution, and re-stated in paragraph 5 of the mandate report for the July 14 conciliation with the Council; notes that these priorities were central to Parliament's budget amendments on priority programmes;
3. Remarks that this is the first budget under the new Financial Framework, under a new Interinstitutional Agreement (IIA) and with many new multiannual programmes; remarks further that a new Financial Regulation should ideally apply for the implementation of the 2007 budget;
4. Highlights that, in line with the cost-benefit approach set out in paragraph 7 of the APS resolution, a qualitative value for money approach was started through policy hearings in the Committee on Budgets, and a thorough analysis of a number of sources of information on the quality of spending of EU funds and on budget implementation; notes that budget amendments were prepared inter alia on the basis of the information thus obtained; welcomes the fact that Council, Commission and Parliament all participate in a value-for-money trend;
5. Considers that the level of aggregate appropriations proposed by the Council in its draft budget falls well below the level needed for the EU to respond effectively to the challenges of globalisation it faces, which only serves to highlight the importance of the third strand of Parliament's strategy, preparing for the review of the MFF, which should deliver EU spending that is better focused on policy priorities; believes that by focusing commitments on priority programmes and by ensuring that funds are well spent, EU spending will better serve the interests of citizens;
6. Expects that all new elements and reforms set down in the new IIA of 17 May 2006 will be fully implemented in the course of the 2007 budget in order to have a rapid effect on the qualitative implementation of the budget and the inter-institutional relationship;
Horizontal issues
Focusing on priorities
7. In line with Parliament's priorities, considers that EU spending should be focused on priority areas and at a higher level than proposed in the draft budget of the Council in order to ensure effective delivery of priority programmes to citizens; therefore proposes to increase payments in the 2007 budget to a level of 1,04% of EU GNI by increasing appropriations on budget lines linked to the Parliament's political priorities; notes that most of the specialised parliamentary committees have proposed to restore the amounts of the Preliminary Draft Budget (PDB), in line with the ongoing legislative procedures, or those beginning in 2007;
Tackling the challenges of globalisation
8. Believes that the European Union must actively address and engage more effectively with the economic, political, social, environmental and development challenges presented inter alia by the ongoing process of globalisation; therefore presents amendments to the 2007 budget that aim at boosting the capacity of the EU economy to engage with these challenges in a more strategic manner, and raising the amounts of development assistance available to regions such as Asia and Latin America and the Mediterranean;
Delivering value for money
9. Emphasises the need for improved value for money in the EU budget; proposes amendments to place 30 % of appropriations in reserve on a number of budget lines until the Commission can reassure the Parliament that this money will be spent in a manner that delivers value for money to the European taxpayer;
10. Recalls that these budget lines were selected on the basis of a thorough examination of the special reports of the Court of Auditors, the Synthesis Reports on the Commission's management of funds, the Budget Forecast Alert prepared by the Commission, and cost-benefit analyses carried out at the request of the Committee on Budgets and taking into account the activity statements prepared by the Commission services;
11. Specifically welcomes the call for a hearing in mid-November for the Commission to respond to the concerns raised in these amendments; urges members of Parliament's specialised committees to participate in this hearing;
12. Reduces by 10% the appropriations for administrative management directly linked to programmes on a horizontal basis; sees no contradiction for budget lines on which the Parliament both places amounts in reserve due to some concerns about the quality of implementation and increases appropriations according to political priorities; reaffirms, in this connection, that it wishes to see qualitative value for money in all areas of EU spending;
13. Recalls the importance attached by Parliament to achieving a positive statement of assurance for funds under shared management; underlines its intention to ensure that, in line with the 2006 IIA, the relevant audit authorities in Member States produce an assessment concerning the compliance of management and control systems with the regulations of the Community; reiterates that Member States therefore undertake to produce an annual summary at the appropriate national level of the available audits and declarations;
Pilot projects and preparatory actions
14. As regards pilot projects and preparatory actions, notes the increased ceilings for new projects set out in the IIA of 17 May 2006; proposes a number of new projects broadly in line with the priorities set out in paragraph 6 of the APS resolution;
Agencies
15. For existing agencies proposes, as a general approach with a small number of specific exceptions, to restore appropriations in the PDB but placing increases above a reference amount in reserve, pending a positive evaluation of the performance of the agency against its final work programme containing a complete task list for 2007 and the new staff policy plans by the Commission; as regards the new agencies (Chemicals Agency, Gender Institute, Fundamental Rights Agency), with a view to ensuring the application of Point 47 of the IIA of 17 May 2006, proposes to delete the appropriations entered in the draft budget in particular in light of the fact that no legal base yet exists for these agencies; expects the Council to clarify host countries' contributions to agencies already established and to adopt a set of binding common standards;
Specific approach per heading
Heading 1a - competitiveness for growth and employment
16. Confirms its conviction expressed in its APS resolution that knowledge, skills, research and development, innovation, information society technologies, and a sustainable transport and energy policy form the basis of a healthy modern economy and are essential for job creation; has therefore decided to reject the Council´s approach of reductions in a number of crucial budget lines aiming at improving the competitiveness of the EU´s economy; has decided to increase payment appropriations for priority programmes linked to the Lisbon agenda such as the Competitiveness and Innovation Programme and the 7th Framework Programme for Research;
17. Regrets that the appropriations for trans-European transport networks (TEN-T) have been considerably reduced for the 2007 - 2013 MFF to a level lower than had been anticipated; underlines the importance of a clear statement from the Commission of its proposed priorities for TEN-T investment; awaits a satisfactory agreement with the Council and the Commission on a regulation on financial aid in the field of trans-European transport networks and priority projects to which funds should be allocated;
18. Is convinced that raising the EU's competitiveness is an essential element of the EU's response to the challenges of globalisation; therefore considers increases in appropriations in heading 1a to be a clear signal of the future direction that EU spending should take; recalls the need for adequate public funding to create the pump-priming effect expected of European Investment Bank cofinancing; awaits with impatience the proposals by the Commission and Council on this subject; stresses that an increase in the long-term subscribed capital would be desirable for the European Investment Fund, both to accompany the introduction of the new mandates (including the CIP) in 2007 and to finance the new technology transfer project operations, as wished by Parliament, the Council or the Commission;
19. Stresses the extraordinary technological and economic significance of the Galileo programme; reminds the Commission that, taken over the period as a whole, this programme is underfinanced in the new MFF and calls on the Commission to seek promptly a workable and lasting solution in order to ensure the success of this programme;
Heading 1b - cohesion for growth and employment
20. Notes that the appropriations for the structural and cohesion funds are considerably lower for the 2007 - 2013 MFF than had been anticipated, largely as a result of the conclusions of the December 2005 European Council; considers therefore that the appropriations in the PDB should be restored; underlines the importance of establishing and approving as quickly as possible national programmes now that the new IIA has been agreed; stresses the importance of cohesion as one of the policy priorities of the EU; has decided to increase payment appropriations for budget lines linked to cohesion in line with its policy priorities;
21. Calls on the Commission to present the requisite texts and initiate procedures as soon as possible to enable the allocation of resources for the International Fund for Ireland during the 2007 budgetary exercise; further calls on the Commission to clarify the legal basis for the Peace Programme;
Heading 2 - preservation and management of natural resources
22. Notes that 2007 will be the first year of full implementation of the most recent reform of the Common Agricultural Policy (CAP); deplores the Council's drastic across-the-board cut in market expenditure of EUR 525 million, based on accounting criteria and without taking account of Parliament's priorities; calls therefore for the re-establishment of the figures in the PDB;
23. Deplores the fact that in spite of the major needs for restructuring, modernisation and diversification of Europe's rural economy, the resources allocated to rural development are set to fall in real terms; considers that a voluntary transfer of funds from direct agricultural support (CAP "first pillar") to rural development is not the appropriate means for remedying this situation; expresses in this connection strong reservations about the current Commission proposal regarding voluntary modulation of up to 20% of direct agricultural support to rural development;
Heading 3a - freedom, security and justice
23. Points out that the area of Freedom, Justice and Security, in particular the promotion of fundamental rights, the definition of a common asylum and migration policy and the fight against terrorism and organised crime, is one of the Union’s key priorities; resolves accordingly to increase the resources allocated to this area, in particular to Eurojust, the sole body for judicial cooperation between the Member States in the criminal law field, the growing effectiveness of which must be stepped up still further;
24. Considers that integrated management of the Union’s external borders is one of the objectives currently requiring urgent, and greater, support; accordingly backs the increase in resources made available to the External Borders Fund; increases the resources made available to the FRONTEX Agency; restates its repeatedly made demand that Europol be placed on a Community footing in order both to increase its effectiveness and to step up the democratic and judicial oversight to which it must be subject;
Heading 3b - citizenship
25. Recalls the importance of the principle of subsidiarity in the field of culture, education, training and youth, and believes that respect of pluralism of opinion is the first condition for an effective communication policy in order to bring the EU closer to citizens; considers that better use can be made of new communications media to bring together European policymakers from all political opinion to share ideas; urges the Commission to clarify the budget implications of and the actions to be taken under the Plan D for Democracy Debate and Dialogue; asks the Commission to publish on the Internet the detail of allocation of subsidies (amounts and beneficiaries) for all actions;
Heading 4 - the EU as a global partner
26. Believes that the EU can and should be engaging more quickly and more strategically with the process of globalisation; proposes the restoration of PDB figures on a number of lines and increases beyond the PDB in payments and in commitments in some areas with a view to boosting EU activities through Community programmes in the fields of foreign policy, development and humanitarian aid, and business and scientific exchanges with key emerging countries such as China and India;
27. Notes that the new legal framework for the EU's external actions also implies a new budget structure; welcomes in general the simplification of instruments and the new budget nomenclature proposed with it; welcomes also the presentation of a separate instrument on Human rights and Democracy, which requires a modification of the nomenclature of the PDB; cannot accept, however, that a number of the proposed changes reduce transparency for either sectors and/ or regions and will introduce necessary modifications;
28. Is concerned that the expansion of activities in the area of the Common Foreign and Security Policy (CFSP) has not been matched by increased democratic accountability and parliamentary scrutiny; proposes budgetary amendments that seek to foster a greater degree of transparency and cooperation in this regard;
Heading 5 - administration
29. Is firmly opposed to the approach adopted by the Council in the draft declarations annexed to the draft budget on administrative resources that advocated cutting 200 posts in the EU institutions, principally the Commission, in 2008 and a further 500 posts between 2008 and 2010;
30. Decides to restore the cuts made by the Council on the Commission's administrative
expenditure including for the establishment plan in order to allow its proper functioning; however, enters EUR 50 million in the reserve with four conditions as follows:
· commitment to carry out a screening exercise before 30 April 2007 providing a mid-term evaluation of its staff needs and a detailed report on the Commission's staffing of support and coordination functions;
· commitment to set down an improved procedure in line with the Framework Agreement to include Parliament's legislative and budgetary priorities in its legislative and work programme, allowing a presentation before Parliament in February 2007 of the Union's work programme;
· agreement on a joint programme on simplification of the Union's regulatory environment;
· commitment to provide a state of play of the review of all outstanding regulations including a report on the Commission's activities to improve the transposition of EU law into national law to ensure that the criteria to strengthen competitiveness are met;
31. Is of the opinion that the European Communities Personnel Selection Office (EPSO) should introduce radical changes in its operating methods in order to offer to the Institutions more quickly a greater number of candidates who are more suited to the Institutions' needs;
32. Takes note of the opinions voted by specialised committees annexed to this resolution;
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33. Instructs its President to forward this resolution, together with the amendments and proposed modifications to Section III of the draft general budget, to the Council and Commission, and to the other institutions and bodies concerned.
EXPLANATORY STATEMENT
on context and procedural aspects
"If an idea is worth having once, it's worth having twice."
Tom Stoppard
1. State of play
1. On 15 December 2005, the 2006 Budget was adopted with the European Parliament’s second reading. It was the last budget of the Financial Perspective 2000-2006.
2. The total level of commitment appropriations amounts to EUR 121 190 million, which represents an increase of 4.5 % over 2005. Payment appropriations increase by 5.9 % to EUR 111 969 million, which represents 1.01 % of EU GNI.
Those margins remaining below the 2006 Financial Perspective ceilings are EUR 2 505 million for commitments and EUR 7 323 million for payments.
3. Like most of the budgets of the Financial Perspective 2000-2006, the flexibility instrument was mobilised. The ceiling of heading 4 (external actions) was increased by EUR 275 million, in particular for the reconstruction of Iraq (EUR 100 million), the reconstruction assistance to the countries affected by the Indian ocean tsunami (EUR 95 million), Sugar protocol support (EUR 40 million) and CFSP (EUR 40 million).
4. The first question the General Rapporteur for the Budget 2007 needs to address is in which context the 2007 budgetary procedure should be drawn up. The current state of play is as follows:
· The Commission presented a first set of proposals[1] for a new Financial Perspective and Interinstitutional Agreement in July 2004, followed by a number of legislative proposals to renew the Community programmes which expire at the end of 2006.
The so-called 'Prodi package' was endorsed by the new 'Barroso Commission'.
· On 8 June 2005, the European Parliament adopted its negotiating position for the next multiannual financial framework[2].
On 17 December 2005, the European Council finally reached an agreement on the next multiannual financial framework 2007-2013. In its resolution of 18 January 2006, the European Parliament “rejects the European Council's conclusions in their current form” but indicates its will to enter into constructive negotiations with the Council on the basis of their respective positions.
· On 1 February 2006, the Commission presented a revised proposal of the IIA as requested by the European Parliament in its resolution of 1 December 2005. This revised proposal which incorporates some of Parliament's requests and takes on board the conclusions of the European Council is the new basis for the negotiations on the next IIA. It contains no figures.
The three institutions have indicated their common goal to reach an agreement under the Austrian Presidency, if possible in April-May 2006.
5. The Rapporteur is mindful that not only can there be no financial perspective without the European Parliament's agreement, but also the agreement on the next Financial Perspective is linked to the agreement on the next IIA.
He notes that at this stage the revised proposal of the Commission does not fully take into account Parliament's requests, as recently stressed by the Committee on Budgets, nor is the Council's mandate yet clear.
2. The first Budget of a new financial period
6. It should be remembered that, the multiannual financial framework is not a multiannual budget. In this context, therefore, where 90 % of EU legislation will be renewed after 2006, most of which co-decided, the Rapporteur is aware of the necessity to leave some room for manoeuvre in the annual procedure.
7. In case of an agreement on the next FP-IIA, the legislative procedures will be finalised in line with the provisions of the "Guidelines for legislative proposals related to the 2007-2013 multi-annual financial framework" of 18 October 2005 by the European Parliament and the Council.[3]
"After agreement on the IIA, the European Parliament and Council, on the basis of proposals from the Commission to adapt the relevant legislative bases, will agree on the financial envelopes of individual legislative proposals pending before the European Parliament and Council and proceed to their final adoption."
8. Although the main political programmes provided for in the next Financial Perspective will be set out in the context of the legislative procedures, the Rapporteur:
· believes that, as the financial envelopes are agreed, the 2007 Budget procedure can offer a real opportunity for fine tuning as well as leverage for setting priorities; considers that the annual budget procedure could be used as a means for the Parliament to secure its priorities in ongoing legislation procedures;
· is convinced that the budget should not only be in the citizens' mind a matter for relations between rich and poor countries as the phenomenon of globalisation becomes more pervasive in the policy making process, but should be used as a mean of demonstrating the European added value for modern policies which respond to citizens' expectations facing the new challenges in a rapidly changing world;
· is determined to optimise the quantitative and qualitative aspects of the implementation of the budget towards the tax payers through cost benefit analysis of a number of specific programmes; wishes furthermore to take the opportunity of the first budget of a new financial period to give financial programming an important dimension, in line with the joint declaration agreed in July 2004;
· believes likely that the Budget 2007 will provide an opportunity to raise those issues which have not been fully addressed in the Financial Perspective but need to be fully considered in the review process.
3. Consequences for the 2007 Budget
The main track: an agreement on IIA and the Financial Perspective in April/May 2006.
9. The Rapporteur for the Budget 2007 hopes that all the efforts made by Reimer Böge, the Rapporteur on the IIA and Financial Perspective, and the Committee on Budgets to conclude the negotiations will succeed, but these negotiations will very much depend on the openness of the Council to the carefully formulated requests of the European Parliament.
10. In this regard, at least for the European Parliament's part, the aim is to achieve a sound IIA and Financial Perspective rather than to conclude an unsatisfactory one quickly. Although the Rapporteur considers it desirable that an agreement is concluded in April/May 2006, this scenario cannot be the only one to be considered. If, at this date, uncertainties remain on the financial framework, the annual budgetary procedure should, nevertheless, have a clear basis on which to proceed.
11. According to the normal calendar agreed by the institutions for the annual budgetary procedure, the preparatory work for Budget 2007 is now underway. The Commission plans to adopt the Annual Policy Strategy (APS) on 14th March and the Preliminary Draft Budget (PDB) on 3 May.
The alternative track: in case of non -agreement in May 2006
12. Article 26 of the Interinstitutional Agreement contains provisions in absence of agreement on a new FP-IIA:
“Should the two arms of the budgetary authority fail to agree on a new financial perspective and unless the existing financial perspective is expressly denounced by one of the parties to this Agreement, the ceilings for the last year covered by the existing financial perspective will be adjusted in accordance with paragraph 15 by applying to these amounts the average rate of increase observed over the preceding period, excluding any adjustments made to take account of enlargement of the Union. This rate of increase may not, however, exceed the rate of growth of Community GNP for the year concerned.”
13. In absence of agreement on a new Financial Perspective, the Commission can adopt the APS as it aims to establish the main priorities for the coming year and estimates the resources required to implement them. The situation is different, however, as far as the PDB is concerned because it implies decisions on figures.
14. The Rapporteur wishes to underline that as the annual and multiannual procedures are being conducted in parallel, different options should be examined, in case of non agreement in April/May. There are two possibilities open in current circumstances:
a) The Commission should prepare the PDB on the basis of the existing ceilings (FP 2000-2006) applying the mechanism foreseen in article 26 of the IIA[4]
b) The current IIA is denounced by European Parliament or Council. In this case, the provisions of the Treaty for annual budgets (article 272) apply.
15. From a political point of view, article 26 is neither workable nor acceptable to the European Parliament, as referred to by the Rapporteur on the Financial Perspective, Mr Reimer Böge, in his working document n° 1[5], because:
a) the use of this automatic mechanism over the years leads to a reduction of the NCE,
b) the structure of the current FP is not adequate to highlight the priorities identified by the Commission and shared by the Parliament (i.e. Lisbon strategy),
c) the EP cannot use the appropriations of heading 7 (pre-accession),
d) the starting point for the prolongation - FP for the year 2006 - is based on EU-25 while the FP for 2007 onwards will be for EU-27.
16. The Rapporteur acknowledges that Parliament finds itself in a delicate position where legal obligations and political decisions are of considerable significance but believes that the European Parliament cannot take the risk to be bound by the provisions of article 26. Neither can it anticipate the result of the negotiations on the next FP-IIA.
17. In a note dated 7 February, the European Parliament's Legal Service considers the context of uncertainty concerning the outcome of the negotiations. According to the Legal Service, denunciation of the IIA should take place “early in 2006” in respect of the principle of loyal cooperation between the institutions. A late denunciation could imply an implicit acceptance by the European Parliament of the future IIA. As the opinion by the Legal Service suggests, the Rapporteur believes that the European Parliament should reserve its position concerning the possibility to denounce the current IIA before the new IIA is agreed.
18. The Rapporteur suggests that once it is confirmed that article. 26 in its current form is not an option (automatic prolongation of 1b financial framework), such a position should be taken by the European Parliament before the PDB is presented, especially in case the second trialogue of 21 March 2006 indicates that no agreement can been reached. After the vote on the resolution, a letter could be sent by the President of Parliament to the President of the Commission and the President of the Council to inform them of the European Parliament decision confirming the will to continue the ongoing negotiations without prejudice of the outcome. In reality, this decision would confirm Parliament's rejection of a mechanical continuation of the current FP.
The link with enlargement
19. In addition to the transition beyond the year 2006, the Rapporteur wishes to raise another question which has an impact on the annual 2007 Budget, relating to enlargement.
The forecasts for the accession of Bulgaria and Romania are based on a political decision (with the consent of the European Parliament) to be taken before next summer.
20. Although the Commission has based its proposal on an EU with 27 countries, no agreement for a budget for 27 countries can be concluded before the formal decision on enlargement has been taken. Therefore the Rapporteur considers that with or without a new Financial Perspective, the Commission should present the PDB for 2007 for EU 25 and, once the accession becomes effective, present an amending Letter for EU 2 on a similar basis as for the enlargement to EU 10 in 2004.
Conclusions
21. On the basis of the following document the Rapporteur asks the Committee on Budgets to:
· emphasise that it is essential that the Commission leaves a margin of manoeuvre for the annual procedure, urging the Commission to present a PDB, respecting the co-decisions but leaving sufficient margin to allow the normal evolution of the annual procedure, in case an agreement on the IIA/FP is reached;
· to agree that the European Parliament should reserve its position concerning the possibility to denounce the current IIA and in particular of art. 26 thereof to avoid the automatic prolongation of the current system;
· request the Commission that in case no agreement is reached before April/May on the IIA, to present a PDB based on art. 272 of the Treaty, without excluding alternative scenarios, as indicated in Mr. Böge's working document n° 1;
ask the Commission to present the PDB for 25 Member States until the accession of Bulgaria and Romania becomes effective.
on political priorities for the 2007 Budget
"Imagination is more important than knowledge."
Albert Einstein
1. BACKGROUND
1. The first years of the European Union budget in the 1970s were spent mostly on the development of the CAP. Then came the Structural Funds predominance in the 1980s, not least to help the transition of the new Mediterranean arrivals. The tempo changed with the fall of the Berlin Wall and the collapse of the Soviet Union when external programmes were developed to assist infrastructures in Central and Eastern Europe with such actions as Phare and Tacis.
2. During this latter period, from 1984 onwards, tremendous steps were taken in building on the foundations of the Rome Treaty of 1957, with no less than four Treaty revisions in the space of the next 20 years - the Single European Act, Maastricht, Amsterdam and then Nice - the fastest period of voluntary sovereignty-sharing that the world has ever seen. Changes not only introduced vast new competences for the European Union to manage such policies as the single market, the single currency, the environment and an emerging foreign policy. The financial perspective also evolved as a means of providing a framework, also starting in 1984, in which expenditure could be envisaged for the rapidly developing European policies over a long time period.
3. In the meanwhile, the world has not stood still. The fall of the Berlin Wall in November 1989 started the process of Central and Eastern European enlargement of the European Union which has still to welcome two Eastern countries, Bulgaria and Romania, expected for January 2007. Furthermore, huge advances in technology took place, which are currently reshaping the global marketplace. The world wide web, only just over a decade old with the introduction of the browser system in 1995, has fundamentally not only altered the way in which people work and do business, but also has brought in over 2 billion consumers into the global market. As a result, barriers are being flattened and competition is more focussed and vigorous for European countries than at any other time in the history of the EU.
4. Globalisation is no new phenomenon, but is a fact of life. As recently described by a leading European industrialist, 'it is the phenomenon of the gradual and worldwide elimination of physical, political, societal, cultural , linguistic and other borders, which separate economic regions, cultural or scientific communities, political regimes and other entities'. With the resulting intensity in global competition comes the central question on the capability of entrepreneurs and societies to adjust sufficiently to the changes underway. While most businesses are coping with the challenges this brings, there is less certainty about the success of societies to adjust. The saying that everything is being internationalised except governments has an undeniably strong ring of truth about it.
5. The policy debate about Europe's adjustment to these trends is picking up, in particular in the wake of the French and Dutch votes on the Constitutional Treaty. Issues such as the vital necessity to invest in research and promote innovation, and providing the right environment in which SMEs can flourish are increasingly recognised as major priorities for Europe's competitiveness. The urgent need to assure long-term energy supplies and the related environmental factors will continue to require clear solutions. Not least the effect of demographic change and immigration will be a theme of growing importance in the minds of European policy makers. Europe should not just manage the process of globalisation, it should try to lead it!
6. Why mention these subjects in a priorities paper for the annual budget? The reason is simple. As the EU completes its discussions on a new financial perspective, probably running to 2013, it is essential for policy makers to focus on what the real challenges will be for the EU in the years ahead, and not be limited to old notions of what were priorities a decade ago. The first budget of the new FP should be strategic in nature, looking at those areas of external and internal policies where funding can make a significant difference and which provide real value for money. This is of particular importance should the Union eventually be landed with a FP which is more a holding operation than a fundamental shift in policy consideration.
7. A critical assessment of the current FP proposed for the next seven years reveals that never have the global challenges been greater - and yet the resources likely to be available to meet them are insufficient, especially in the area of research and innovation. It is a financial perspective more for the 1990s than the 21st century. This makes it all the more important to ensure that a detailed review will take place in 2008/2009 with proper preparation of expenditure priorities for the next decade.
8. This is why the rapporteur considers that the debate on the 2007 budget should develop with the following three strands in mind:
– Policy priorities
– Qualitative value for money
– Begin preparing for the review
2. POLICY PRIORITIES FOR THE BUDGET 2007
9. For 2007, the first annual budget of the new financial perspective, the rapporteur sees the following priorities:
– External Relations – the EUs role in a globalised world
§ Partnership/Cooperation agreements
§ European neighbourhood policy & Pre-accession instruments
§ Development Policy; Democratisation and Human Rights
§ Common Foreign and Security Policy
– The Security dimension -
§ External e.g. energy security, terrorist threats
§ Internal e.g. Border controls, immigration
– Internal Policies -
§ Lisbon Agenda incl. Research and Innovation
§ Environment
§ Citizens and communication
– Agencies
2.1. External Relations
Introduction:
10. The EU's external relations policies have faced a number of challenges over the period of 2000-2006, not least budgetary ones. Not only have the resources available been under severe pressure due to unexpected demands on the budget for traditional policies, added over time as international developments have occurred which required EU support. Furthermore, fresh challenges are leading to new policies which create the need for additional expenditure in a world very different from only a decade ago.
11. It seems ironic that the European Council should have reached a common position on the 2007-2013 FP which implies a reduction of some 20% for the external instruments compared to the Commission's original proposals while still expecting the EU to finally take decisive steps towards becoming a significant "global player".
12. The rapporteur is convinced that a significant budgetary priority for 2007 must be to support Europe's relationship with the rest of the world through active engagement. It is time for the EU to spend more of its energies in finding out what is happening beyond its frontiers and learn what consequences there are for its policies. In doing so the message to other countries, and particularly to our neighbours, must build on already existing agreements (such as Association agreements in Eastern Europe and the Balkans, and the Barcelona process to the south or the strategic partnership to the East). In restricted budgetary circumstances, priorities will need to be established. The following four areas are relevant in this context:
Partnership and cooperation agreements
13. There has been a proliferation of strategic agreements between the Union and third countries or regions in recent years. This increase in the scope and complexity of the Europe's external relations partly reflects on-going changes and new necessities in a globalising world. However, the rapporteur believes that for the EU to fully assume its role as a credible global partner, its external relations must first and foremost be based on a coherent, over-arching strategy which clearly defines the Union's interests and strategic priorities in the 21st century. A first step towards such a broader strategy could be an assessment of existing and envisaged agreements, with particular attention given to their purpose, effectiveness and the Union's interests and strategic objectives involved.
14. Before this backdrop, the rapporteur believes that the EU's broadest, deepest and strategically most important partnership - namely that with the United States - should be placed on a new strategic footing, allowing both transatlantic partners to pursue their shared interests and respond to shared global challenges jointly and with far greater effectiveness. However, despite the renewed determination of the EU and US administrations to shape a common agenda, there has been little or no progress in adapting the EU's relationship with the United States to the 21st century. As noted in the Böge report on policy challenges and budgetary means, 'this approach is not reflected in the Commission proposal and the European Parliament should participate in decisions on such matters if they have budgetary implications'.
European Neighbourhood Policy & Pre-accession Instrument
15. These policies should remain a high priority for 2007: budgetary resources should be made available to continue to promote democracy, free trade and security essentially through liberal engagement on our part, through trade and economic reform policies, and through financial assistance programmes.
16. For the co-decision instruments, the question of policy influence of the Parliament is of high importance and is currently being dealt with in the respective committees. Your rapporteur fully supports the lead committees' efforts to steer the available resources to priority areas (rather than leaving this entirely to Commission and Council under comitology procedures). It is, however, very important that sufficient leeway is left for political judgment in the budgetary procedure: the budget structure to be proposed by the Commission, and possibly changed by the Parliament, is therefore relevant. The rapporteur also considers that the question of political "allocation criteria" for how the neighbourhood policy resources should be divided among countries, policies, regions, and how this will tie in with the annual budget procedure, is a crucial one.
17. The rapporteur is conscious that some of these hard choices will and should be settled at the level of the co-decision acts currently being dealt with. How would a 20% reduction under heading 4 be dealt with? What would be the relationship between the financial envelopes of the three main co-decision acts: Neighbourhood, Stability Instrument and Development Instrument? What would be the resulting effects on the Pre-accession Instrument and humanitarian aid that are not co-decided? These are difficult questions which can only be answered once the new FP and its flexibility provisions are known.
Development Policy; Democratisation and Human Rights
18. With the number of people living in extreme poverty having more than doubled over the last three decades, an effective and coherent development policy for the Union must be considered a crucial element of Europe's engagement with the wider world. The rapporteur would like to reiterate the call in the Böge Report for sufficient resources to be made available in order to honour existing commitments to poverty reduction and, most importantly, the Millennium Development Goals (MDGs). Furthermore, the promotion of democracy, good governance and human rights should be viewed as an integral part of any sustainable development policy and instrumental in successfully completing the MDGs. This should be reflected in the budget's priorities.
19. In the light of the currently proposed reduction under heading 4, the rapporteur believes it to be more important than ever to ensure that the Union's aid is allocated and implemented as effectively as possible. In particular, attention should be focused on improving mechanisms for measuring the results and impact of external aid programmes so as to ensure the highest possible quality of EU aid. Furthermore, the rapporteur suggests to examine how the added value of Community aid may be maximised by enhancing the coordination, complementarity and coherence of member states' development policies and aid. This should include a detailed look at the programmes on democratisation and human rights.
Common Foreign and Security Policy
20. Actions in the field of CFSP should remain a high priority in order to further enhance the Union's contribution to maintaining peace, security and democracy, including actions in the field of conflict prevention and resolution. The rapporteur stresses the importance he attaches to the new provisions foreseen in the joint declaration of November 2005, which include consultation and information meetings with the Presidency chairman of the Political and Security Committee, and expects the Council to fully comply with these provisions. In this context of consultation, he places great emphasis on the a priori approach called for by the European Parliament in the 2006 Brok report on the CFSP which the Council should honour. The rapporteur would also like to underline the importance of good management of CFSP funds and, for the moment, notes that the Commission has been challenged by the Council as regards the legality (legal bases) of certain actions. The rapporteur therefore recalls the European Parliament's previous demand that the "grey zone" between Community competence and expenditure - vis-à-vis Member States competence and expenditure - needs to be better clarified, remaining within the bounds of what is permissible under the Treaties.
2.2 The security dimension
This dimension gains importance under the new financial perspective. For the sake of convenience, it can be divided into external and internal aspects.
External aspects: energy security as an example
21. Recent events have reminded us that security of energy supply cannot be taken for granted. The European Union is extremely dependent on its external energy supplies, with imports currently accounting for 50% of its demand. This figure is projected to rise to 70% by 2030 if current trends persist. 77% of EU demand for oil and 51% of EU demand for gas is met from imports and there will be an increased demand from third countries that will compete for the energy resources required by EU Member States. At the same time, EU energy consumption is projected to grow by 22% in the period 1990 to 2020.
22. The EU is also facing environmental challenges like the Kyoto target of an 8% reduction in CO2 by 2010. Furthermore, rising energy prices have a direct and important impact on the consumer and on the competitiveness of the European economy. In view of these challenges, the relevance of nuclear power will have to be reassessed. Furthermore, the European Community has taken legislative action on a number of energy issues like security of electricity supply, the use of bio-fuels, the promotion of renewable energy sources, demand management measures, the improvement of energy efficiency and the liberalisation of energy markets. Yet, implementation of many of these measures by the Member States is not completed. The current energy programme 2003-2006 "Intelligent Energy for Europe"[6] aims at contributing to the pursuit of the 3 main objectives of European energy policy: security of supply, competitiveness and environmental protection.
Internal aspects: border controls and immigration
23. European citizens need security in their everyday lives. The Commission's new approach to replace the multitude of instruments and budget lines in this field by three main framework programmes[7] is certainly welcomed by the rapporteur, as it provides more consistency and transparency in this complex area.
24. Given the fact, however, that Council has more than halved the Commission's initial proposal for funding of the new heading 3 "Citizenship, freedom, security and justice" from EU 20,945 million to EUR 10,270 million, decisions will need to be taken on where the available resources should be concentrated in 2007. This decision will even be more important as it will lay the cornerstones for the future orientation of the Union's internal security. "Value for money" will be an important guiding principle for assessing the allocation of scarce resources in this field. In addition, the effects of immigration on the European citizens will certainly have to be dealt with, and will thus be a priority for the rapporteur.
2.3. Internal policies
Lisbon agenda - research and innovation
25. Although crucial parts of the Lisbon Agenda clearly involve decisions that are of a legislative rather than budgetary nature, as for example the services directive, and financing at EU level is complimentary to national financing, the Community budget can and should make an important contribution to key areas such as research an innovation, innovative measures for SMEs and life-long learning:
26. The rapporteur considers that the Parliament's input to the 2006 Spring Council, taking stock of developments both at national and EU level, should , as pointed out in the past by the Committee on Budgets, aim to prioritise different actions in order that resources are not spread too thinly. In this respect, the Commission must also take its responsibility and clearly point out- also in budgetary terms - what choices have been made and on what grounds in its forthcoming APS and PDB.
27. The rapporteur recalls that the budgetary ambitions, with a direct bearing on the outcomes we hope to achieve, are closely linked to the outcome of the current negotiations with the Council on the financial perspective. This is strongly noticeable under heading 1A, which should be a central part of the Community contribution to Europe's efforts in this field. The 7th research framework programme and the Competitiveness and Competition programme will undoubtedly have to be looked at in the course of the budgetary procedure. In addition, it will need to be asked whether the proposed European Institute of Technology will be an effective use of funds or simply deflect attention from existing projects such as the European Research Council.
28. The rapporteur underlines that the very notion of "innovation" and, indeed, "imagination", deserves to be promoted whenever possible through the budget. In this respect, continued emphasis should also be given to pilot projects and preparatory actions in this area.
Environment
29. Within the next Financial Perspective environmental policy will be financed under Heading 2 "Preservation and management of natural resources" together with the CAP, in accordance with the Commission's proposal which provides for a thematic and more visible structure of the Financial Perspective which is accessible to the European citizen. The European Parliament's negotiation position[8] in the Financial Perspective stresses the European Union's environmental policy as an essential instrument which contributes to the realisation of the Lisbon and Gothenburg objectives. The rapporteur considers that the proposed budgetary support for environmental policy in the coming period will give the European Union a leading role in the world in important areas such as mitigating the effect of climate change or preserving natural resources. A sustainable environmental policy is one of the main challenges for which there is a real European added value.
Citizens and communication
30. The current response to the so-called "crisis of trust" has been rather predictable. The Commission has presented new policy papers for new communication strategies asking for new money to put them into practice. The Council has cut funds for those communication lines and Parliament has reinstated the allocations and tried - sometimes successfully - to even increase these funds. Quite regularly, however, one could see that execution of the communication lines in the annual budgets has left a lot to be desired.
31. Certainly, communication is a key factor in helping European citizens understand the EU better. Instead of trying out new concepts all the time and developing new costly strategies, which are then poorly implemented, the rapporteur thinks it essential to assess in-depth where real value for money lies.
32. Direct information for the citizens about their rights in the European Union, be it as a worker, student or pensioner, is not well developed. It would be helpful for citizens to be informed about the specific advantages the common market means to their every day lives, about transfer of pension rights, acknowledgement of professional diplomas or the consumption of social benefits acquired in another Member State. Instead of producing abstract glossy brochures, the Union should first try to fulfill these basic communication needs of its citizens.
33. The rapporteur is convinced that the potential for synergies between the communication activities of Commission and Parliament still has not been fully developed. The value of European Union Houses as a means of using scarce resources effectively needs to be more carefully considered.
Agencies
34. In the 1996 Budget, the rapporteur raised the point concerning the need for Parliament to ensure political and budgetary control over the decentralised agencies. Ten years later, the number of agencies has increased from 5 to 25 and the types of agencies have been diversified (decentralised agencies, regulatory agencies, executive agencies). Although the Parliament's control powers have been formalised in the new Financial Regulation, the rapporteur is of the opinion that such a new form of EU governance should not develop so as to prejudice operational programmes. Therefore he fully supports the request made by the rapporteur on FP-IIA to have a binding mechanism for the Agencies under each heading of the new financial framework.
35. The rapporteur is mindful that most of Agencies' founding regulations are adopted under co-decision on a multi-annual basis, while they receive subsidies decided on an annual basis in the context of the budgetary procedure. Under tight ceilings and in the context of ABB (policy area approach), the specialised committees will have to indicate their priorities between the funding of operational programmes and the financing of the agencies.
36. The rapporteur welcomes the proposal finally made by the Commission for a tough policy on agencies and expects the provisions to be laid down before the 2007 budgetary procedure. He intends to develop his views on existing and future Agencies in a specific working document to be presented in the context of the annual meeting of the Committee on Budgets and the Committee on Budgetary Control with the Agency directors.
3. QUALITATIVE VALUE FOR MONEY
37. The December agreement of the European Council has clearly shown that the battle for resources has begun. Council figures would mean a decrease of resources available between 2007 - 2013 by over 15% as compared to what the Commission thought necessary in its original proposal. For the rapporteur it is absolutely necessary in this situation to start looking at the quality of European Union expenditure. Do we get value for money?
38. To the rapporteur, the beginning of the new financial perspective offers a significant opportunity for reassessment: if a programme is known not to be successful or is no longer a priority, why not remove it? At the same time, an open mind should be kept to introduce new programmes if they are needed for the EU to keep up with the pace of globalisation.
39. The rapporteur is of the opinion that a qualitative value for money should compensate the absence of quantity in budgetary means. The European Budget is financed by the European tax payers to fund activities which are expected to bring a European added value for the European citizens. In this sense, the rapporteur believes that the responsibility of qualitative and cost benefit aspects of the expenditure belongs to the Budgetary Authority. He considers that under a tight financial perspective with very little room for new actions, time has come to start looking at the quality of European expenditure and value for money. This will be the subject of the next working document WD3.
40. As already announced when he outlined his priorities for B’ 2007, the rapporteur is willing to ask for cost benefit analysis on certain programmes , in view to make a political evaluation of EU spending under certain areas. The aim will be to highlight the performance of these programmes or actions financed by the EU Budget on the basis of some criteria:
- did the policy achieve the objectives set up by the Budgetary Authority ?
- what is the impact assessment compared to the quantity of funding involved ?
- what part of the funding has been dedicated to administrative expenditure and what part to operational expenditure ?
- were human and financial resources efficiently used ?
- what the European added value of the programmes / action ?
Such cost benefit analysis and impact assessment should be carried out during the first semester of the year 2006 in order to proceed to the evaluations before EP’s first reading on the Draft Budget for 2007, in view of the political decision. The rapporteur is convinced that the new financial perspective offers an opportunity to develop a new concept of cost-benefit spending.
4. BEGIN PREPARING FOR THE REVIEW
41. Both the European Council and the European Parliament have asked for a mid-term review of the next multi-annual financial framework (MFF). Part III of the December 2005 European Council conclusions (paragraph 79) reads as follows:
Europeans are living through an era of accelerating change and upheaval. The increasing pace of globalisation and rapid technological change continues to offer new opportunities and present new challenges. Against this background, the European Council agrees that the EU should carry out a comprehensive reassessment of the financial framework, covering both revenue and expenditure, to sustain modernisation and to enhance it, on an ongoing basis.
42. Both the Parliament and the Council share the view that the financial framework setting up mid-term political priorities needs to be adjusted to a fast developing world in order to allow the EU to maintain its political and economic position at internal level to meet the Lisbon objectives and at external level to meet the Millenium Goals, to achieve a successful Neighbouring Policy and to take leadership in the globalisation process.
43. The European Parliament's concern for the review is closely linked to the duration of said review. This is clearly outlined in para. 3 of the Parliament's negotiating position[9], there should be a correspondence between the duration of the financial perspective and the 5-years mandates of the Commission and of the European Parliament for reasons of democratic responsibility and accountability.
44. Without prejudice to either the outcome of the future IIA or to the contents of the next financial perspective, the rapporteur considers that the Budget 2007, as the first budget of the next period, represents an opportunity to launch the new programmes within the scope of adjustments to new needs which might appear in the first part of the period. This will be the subject of a more detailed working document later in the budget process.
45. The review of all aspects of EU spending and resources planned for 2008 will offer a real opportunity to have a close look at the ways in which our money is spent. There will never be more willingness to accept changes than in times when resources are scarce. Only a comprehensive reassessment of revenue and expenditure will enable us "to shake up the system" in order to meet the challenges of our fast changing world.
on cost-benefit of EU policies
"A cynic is a man who knows the price of everything
but the value of nothing."
Oscar Wilde
1. In his working document N° 2[10] on political priorities for the 2007 budget, the rapporteur has underlined the importance of assessing the quantitative and qualitative aspects of EU policies. In his draft report on the Commission's Annual Policy Strategy[11], he has identified the qualitative value for money as one of the three priorities for budget 2007:
29. Proposes to ask for cost-benefit studies to be carried out on specific areas of the budget by using part of the resources allocated to the parliamentary committees in order to assess the regularity (compliance with the Financial Regulation, financial reporting system) and the performance (efficiency of resources, effectiveness of the projects, administrative cost) of the policies as implemented, and to draw the political conclusions of such evaluations;
2. In its conclusions of 14 March 2007[12], the Council also stressed "the necessity of having high quality Activity Statements and financial information on spending proposals in good time" […] "considers it important that the implementation of the EU budget is improved in 2007".
Which objectives?
3. The negative outcomes of the referendums on the Constitutional Treaty in France and the Netherlands have highlighted citizens' concerns about European policies and raised doubts about the capacities and relevance of European institutions which carry out these policies. In this context, the role of the European Parliament as an elected body and its responsibilities as part of the budgetary authority are of significance.
4. At the time when the resources for the European Union are proportionally less than the previous years, the institutions must ensure that policies financed by the EU budget provide value for money in quantitative and qualitative terms.
5. Being the first budget of the new period, the 2007 budget should pave the way for a new culture of "qualitative expenditure". The EU should do better with less. In the rapporteur's view, such approach should be initiated in 2007 and consolidated over the next multi-annual financial framework (MFF) as a mean to compensate restricted ceilings and small margins.
6. As outlined in working document N° 1, after an agreement on the next financial framework, the financial envelope of the multi-annual programmes due to start in 2007 and whose legislative proposals are pending before the EP and the Council, will be adjusted to the ceilings fixed for the different headings.
7. EU legislation reflects those political areas of interest respecting the principle of subsidiarity and proportionality stated in the EC Treaty. The rapporteur considers that the new financial framework and the annual budget provide the opportunity to optimise the quantitative and qualitative aspects of the implementation of the budget by doing thorough cost-benefit analyses on a number of programmes.
Which methodology?
8. The Commission defines its different evaluation functions as follows:
"judgement of intervention according to their results impacts and the needs they aim to satisfy".
9. In the rapporteur's view, less emphasis should be put on the judgement dimension and more on the measurement of the effect of the intervention.
10. Evaluation, as outlined by the Commission, can take place for different activities. It can address a policy, a programme, a project, in line with the Activity Based Budgeting (ABB) nomenclature. Evaluation should focus on some or all of the following key evaluation issues:
· Relevance: To what extent are the objectives of a public intervention (project, programme or policy) appropriate regarding the needs perceived and the problems the intervention is meant to solve?
· Effectiveness: What effects (impacts) have been obtained by the intervention and in particular, have these effects contributed to the achievement of the objectives of the intervention?
· Efficiency (cost-effectiveness): How economically have the various inputs been converted into outputs and results? Were the (expected) effects obtained at a reasonable cost?
· Utility: Do the impacts achieved by an intervention correspond to the needs identified and the problems to be solved?
· Sustainability : Will the effects achieved last in the medium or long term?
11. In the rapporteur's view, these criteria in paragraph 10 above are the means by which one should aim to define the political dimension of an evaluation focussing on the value for money as well as the European added value as set down in the European Parliament's negotiating position for the next financial perspective (2007-2013)[13].
12. The following evaluations can be identified (in chronological order):
· Ex ante evaluation: Evaluation that is performed before the implementation of an intervention. Its purpose is to gather information and carry out analyses that help to evaluate whether these objectives can be met within the financial envelope and that the administrative cost is proportionate to the objectives, that the instruments used are cost.
· Mid-term evaluation: Evaluation that is performed during the implementation period of an intervention. This type of evaluation considers the first outputs and results critically , which enables it to assess the quality of the monitoring and implementation of the intervention. The main focus is to help for preparing adjustments and reprogramming.
· Ex post evaluation : Evaluation that is conducted either on or after the completion of an intervention. It strives to understand the factors of success or failure, as well as the sustainability of results and impacts.
13. In the rapporteur's view, a mix of the three should be taken into account for political evaluation. Although the structure of the next financial framework will change considerably, in particular for the main internal and external policies (Heading 1a-3a and b, 4), the result of an evaluation of a programme run before 2007 (ex post) is useful to evaluate the adequacy and appropriateness of a programme starting in 2007 (ex ante). The link between the two should be emphasised.
Which areas?
14. At the coordinators meeting of 15 March 2006, the principle of cost benefit studies was agreed for a number of policy areas. These studies will be carried out either internally or externally using part of the budgetary expertise earmarked for the Committee on Budgets.
An ex post analysis of the results of these activities will be useful to ensure the success of the new programmes.
· CIP and Impact of different budget instruments on the development of SMEs (Heading 1a)
Continuation of the previous MAP Programme which was a specific instrument to support SMEs in particular (Multi-annual Programme for Enterprise and Entrepreneurship, in 2001-2005). The new Framework Programme for Competitiveness and Innovation (CIP) will be a significant step forward in simplification and rationalisation of Community instruments especially in the areas of improving the business environment of SMEs, innovation on business level and policy analysis, development and coordination of SMEs.
· LIFE (Heading 2)
New programme for the environment, becoming a single financial instrument targeting only the environment (to support the priorities of the 6th Environmental Action Programme in combating climate changes, halting the decline in bio-diversity, minimising negative environmental effect on human health etc.).
· Citizenship (Heading 3b)
Including a wide area of subjects as health and consumer protection, culture, youth (education programmes, their evaluations), vocational training, culture and language, dialogue with the citizens (e.g. financial support granted to associations)
· Communication policy of the European Union (Heading 3b):
Scope, targets, financial means and results.
· Information Policy (Heading 3b)
Evaluation of the financial means and mechanisms for delivering the objectives of the policy with particular focus on tools, tasks and staff of the European Houses, distribution of information.
· Assessment of budgetary resources and means to achieve the Millennium Development Goals (Heading 4)
· Real cost of CFSP (Heading 4)
Evaluation of the network of EU centres abroad, EU monitors, EC support to MERCOSUR, thematic evaluation of population and development oriented programmes in EC external cooperation, different EC country's strategies
· OLAF
After more than five years in operation and at the beginning of a the mandate of the newly appointed Director, the Committee on Budgets should evaluate the cost effectiveness of this body in the protection of European financial interests.
15. The rationale of such evaluations is based on the assumption that although information on results of EU policies is available in many forms and stems from many different sources, it is cumbersome and very time consuming to get an overview of all available information and even more difficult to analyse this information and to extract the most relevant findings which could be of interest for Parliament in adopting its future position on a specific policy area, notably in the budgetary and discharge procedures.
16. It would be of interest of Members to find ways to receive tailored information based on a summary of the most important data about results of EU policies, and draw some conclusions.
Final considerations
17. The general rapporteur considers that it is the first time the Committee on Budgets has tried to deepen its analysis on an assessment of the some of EU activities. The restrictive financial framework renders this exercise even more necessary.
18. The rapporteur is aware that a new culture is necessary to approach EU activities in this way and being the first time this exercise might give a not perfect output. Nevertheless this new approach could constitute a turning point of the definition of political priority and efficiency of EU policies.
19. With a view to making the best use of their contents and drawing conclusions for the 2007 budgetary procedure, the cost-benefit studies should be made available by the end of August if possible, with regards to the provisions of the Financial Regulation.
on external aspects of the 2007 Budget procedure
"No man is an island", John Donne (1572 - 1631)
Introduction
1. This working document examines the resources available to the European Union in the field of external relations in the context of the international challenges that the EU faces in a globalising world. The rapporteur wishes to raise two central questions:
(a) To what extent does projected EU spending on external relations fit with the external challenges that confront the EU?
(b) What are the implications for the 2007 budget procedure, which will define the first year of spending within the new 2007 - 2013 multi-annual financial framework (MFF)?
2. The working document looks first at the international challenges that confront the EU. It then looks at the financial resources available within the new multi-annual financial framework and at how this money is likely to be spent. Finally, it poses some questions that members may wish to consider at the hearing on the external aspects of the 2007 budget procedure that will take place on 29 May.
What are the challenges?
3. As the process of globalisation continues apace, the EU must contend with a wide variety of external challenges. A distinction can be made between "traditional" challenges linked to EU enlargement, countries on the EU's external borders and development spending, and "new" challenges linked to the rise of emerging economies such and India and China, and issues such as energy dependence and the threat of global terrorism. The rapporteur also wishes to stress that the EU's external policy actions should not be seen in a vacuum. In many areas, cooperation with other key international actors, notably the US, is necessary to ensure coherent and co-ordinated external policies.
"Traditional" challenges
4. The EU's external policies, and external spending, have tended to be focussed upon key challenges relating to enlargement, neighbouring regions and development co-operation.
5. The process of enlarging the EU, and seeking to foster stability in and stable relations with countries around the EU's external border have been a major focus of EU external relations policy and spending in recent decades. Table 1 (below) shows that pre-accession and neighbourhood policies are due to account for a major share (about 40 percent) of EU external relations spending during the next MFF.
6. Development co-operation has been, and continues to be, a major element of EU external policy and spending. Table 1 indicates that the development co-operation instrument is likely to account for around 30 percent of EU external spending during the next MFF. It is, however, difficult to give one single figure for EU spending on development co-operation. For example, roughly EUR 500 million annually is spent on humanitarian assistance. Outside of the MFF, the ninth European Development Fund (EDF) contributes EUR 13.5 billion over 5 years for African, Caribbean and Pacific (ACP) partner countries. EU member states also provide large amounts of development assistance through bilateral channels.
7. These "traditional" challenges include crucially important EU contributions in the field of foreign policy. The rapporteur does not question in any way the role that the EU enlargement process has played, and continues to play, in bringing stability, democracy and prosperity to the continent of Europe. Nor does he question the value of EU development co-operation assistance that seeks to meet pressing challenges such as the Millennium Development Goals.
"New"challenges
8. However, the globalising world economy is creating new challenges. EU external policies need to move with the times and adapt to shifting global trends. Without a clear strategy, including the financial means to deal with these challenges, there is a risk that the EU's role will be weakened. This working document will focus briefly on three such challenges:
(i) The role of emerging economies such as China and India
9. The Chinese economy is now of a comparable size to that of the UK or France. China's competitive advantage in manufacturing production due to its vast resources of labour has major implications for global trade flows and the location of production. India is developing a services sector, particularly in information and communications technology, that is also changing the way that many EU and US run their businesses. The impacts of these changes are complex. EU consumers often benefit, but producers in low-value added sectors must deal with a greater competitive challenge.
10. It is beyond the scope of this working document to consider the appropriate EU policy responses to the changing global role of China and India. Some policy responses may be rather "internal" in nature, such as the Globalisation Adjustment Fund. However, in terms of external policies, over and above the current systems of bilateral summits and dialogues on various issues, the rapporteur considers that further analysis must be given to the provision of adequate financial resources to foster effective partnerships with these countries.
(ii) Energy security
11. Energy security is a key issue for the coming decades. The high oil price and the availability of Russian gas supplies were two of the major drivers for energy policy to be a major theme of the Spring European Council. Energy security is, of course, linked to the emergence of China and India as global economic powers. China and India are becoming competitors vis-a-vis the EU for global energy supplies.
12. Again, this working document does not attempt a comprehensive analysis of the appropriate internal and external policy responses. Nonetheless, energy security has not traditionally been a focus for EU external spending. Members of the budgets committee may wish to discuss the extent to which the provision of financial resources is commensurate with the challenges that the EU faces in this regard.
(iii) The threat of global terrorism
13. The events of 11 September 2001 and subsequent terrorist atrocities on the continent of Europe, notably in Madrid and London, have brought issues regarding freedom, security and justice into sharp focus. Table 1 shows that this is an area in which EU spending is set to increase markedly, albeit from a low base, during the next MFF. A key related question is the level at which funds are most usefully spent. A large proportion of public funds spent on counter-terrorist activities is channelled through national interior ministries and security services. Members may wish to consider the extent to which there can be added-value at the European level in this area, and the extent to which co-operation with third countries should be encouraged.
No man is an island
14. These "new" challenges do not only affect the EU. Other industrialised countries must also contend with changing global economic power relations, energy security and global terrorism. The rapporteur stresses that effective cooperation with third countries, notably the US, is an essential part of an effective EU strategy to deal with these challenges. However, effective cooperation requires resources. The rapporteur notes that spending on "cooperation with non-EU industrialised countries" is extremely low. In 2005, around EUR 16 million was the total spent on budget line 19 05 02.
What are the resources?
Table 1: Indicative spending on external policies (EUR million)
Heading |
2007 |
2007-2013 |
|
Pre-accession (IPA) |
1193 |
10213 |
|
Neighbourhood and Partnership (ENPI) |
1390 |
10587 |
|
Development Co-op (DCEC) |
2000 |
15103 |
|
Stability Instrument |
232 |
2531 |
|
CSFP |
150 |
1740 |
|
Loan Guarantee Fund |
188 |
1244 |
|
Emergency Aid Reserve |
taken out |
of MFF |
|
Other |
1046 |
8046 |
|
Total |
6633 |
49463 |
|
15. The new multi-annual financial framework for 2007-2013 that is due to be adopted by the European Parliament at the May plenary session foresees resources of around EUR 50 billion for external relations under Heading 4: "The EU as a global partner". The figures in the table highlight the continuing focus on "traditional" challenges in EU external spending. Of course, spending on policies related to some of the newer challenges comes under other headings. For example, "freedom, security and justice" has its own heading (3A) and an allocation of over EUR 6.5 billion over the MFF. Another example, in the context of energy policy, is spending on nuclear decommissioning under "competitiveness for growth and employment". This will amount to EUR 1.3 billion over the MFF.
Some questions for the hearing
· Does the Commission believe that a clearer definition of what consitutes a "strategic" relationship is necessary in the context of its relations with third countries and regions? What is the role of the transatlantic partnership in this context?
· What will be the relative importance of the "traditional" and "new" challenges that the EU faces over the period 2007 - 2013? What further shifts can one anticipate? How should EU spending on external priorities evolve, for example as regards energy security?
· What steps can be taken in the 2007 budgetary procedure in order to reflect these changing challenges and priorities for an increasingly outward looking EU?
on CFSP and ESDP
"Life belongs to the living, and he who lives must be prepared for changes"
Johann Wolfgang von Goethe (1749 - 1832)
Background
1. Cross-pillar nature of this area remains with CFSP/ESDP matters falling under the second pillar alongside Community policies (first pillar). In external actions, many actions span both the CFSP area and a range of 1st pillar activities where the Community is competent. This is one main factor to explain why it is so difficult to get a coherent overview of actions that are often inter-woven in a specific area or even on a specific matter. Community and CFSP actions can be complementing each other but, also, overlap each other.
2. Aditionally, even within the specific sphere of CFSP/ESDP, matters are further complicated by multiple sources of funding where some parts are financed from the general budget and others from the Member States. Also, the Council's budget is involved. In the rapporteur's view, it is necessary to obtain, for the budget 2007 procedure, an overall picture of which structures are currently involved with/financing CFSP/ESDP actions (including support structures such as the Council's planning-cells and relevant committees)
The current situation
Democratic scrutiny - unsatisfactory...
3. The European Parliament has modest political powers in the field of the CFSP/ESDP. It carries out a supervisory role through its right ‘to be informed’ and its right ‘to be consulted’ laid down by Article 21 of the Treaty on European Union. It should be pointed out that the duty of the Council to consult the EP on the "basic choices" of the CSFP has left a lot to be desired and its practice has come under heavy criticism for a number of years as, for example, the Council's annual report has been almost completely descriptive in nature.
4. In this respect, the rapporteur can only reconfirm the Parliament's rejection of the Council's "a posteriori" approach as regards this political consultation and strongly insist to fulfil the Parliament's rights under the Treaty. "The Presidency shall consult the European parliament on the main aspects and the basic choices of the common and security policy and ensure that the views of the European Parliament are duly taken into consideration....."(Article 21 TEU)
5. In the recent negotiations on the new IIA the Parliament succeeded in obtaining from Council a forward-looking (a-priori-approach) document "setting out the main aspects and basic choices of the CFSP" and an evaluation of the measures launched in the previous year. Within this current framework of cooperation with Council and Commission (build around the provisions of the new IIA) the rapporteur is of the opinion that this basis must be developed to enhance the Parliament's scrutiny role on policy matters.
6. Another important development to this end was the establishment of joint consultation meetings in the framework of political dialogue on CFSP. These are now to take place at least five times a year and were originally established as of 2004, through a final agreement in the budget conciliation meeting of November 2003. These meetings should also be used to strengthen democratic control.
7. The European Parliament, as part of the budgetary authority, also has far-reaching budgetary powers in relation to the CFSP budget which it exercises by virtue of Article 28 of the Treaty on European Union.
8. Therefore, the financing of CFSP from the general budget, where Parliament and Council enjoy equal rights and powers, is also to be considered a most important means for the Parliament to ensure democratic control over this policy. It is even the case, since expenditure for CFSP is classified as "non-compulsory", that the Parliament has a strong role as it adopts the final appropriations for the following year.
9. In terms of the new draft IIA, the EP and Council will nevertheless have reached a global agreement of funding for the period 2007-2013 concerning the level of CFSP appropriations. The institutions will of course be bound by this as long as they are party to the IIA.
"......The European Parliament, the Council and the Commission agree that at least EUR 1.740 million will be available for the CFSP over the period 2007-2013 and that the amount for actions entered under the article mentioned in the third indent may not exceed 20 % of the overall amount of the CFSP budget chapter[14]
10. There is a clear link between the financing structure of actions and the possibility to exercise democratic control. In several cases, today, it is the case that part of an action can be scrutinised by the European Parliament on the basis of financial statements received. Another part of the same action might be scrutinised by national parliaments (provided the necessary structures between Council/governments/national parliaments are in place). Where does this leave any possible assessment by elected representatives as to the full scope of these CFSP/ESDP actions? It is a relevant, and perhaps worrying, question to ask.
11. The rapporteur emphasises that scrutiny of financing by the representatives of the European taxpayers has to be guaranteed, either at national level, if the financing is made purely on a national basis, or at European level, if CFSP actions are funded in part or in full through the EU budget.
The new Inter-institutional Agreement
12. The new draft IIA builds and consolidates what had previously been achieved in the last IIA, the joint declaration of 2002, and the exchange of letters between the Budgets Committee chairman and the Council Presidency to set of the "joint information meetings" in the 2004 budget procedure and the "upgrading" of Council representation to Ambassador level in the course of the 2006 budget procedure.
13. These provisions on consultation and political dialogue are of particular importance for Parliament as they might introduce further political participation and democratic control of a sector in which, so far, points on financial elements have often constituted the only source of information. One might even say that, by and large, this policy was often conceived and implemented purely at intergovernmental-level meetings without really being scrutinised by a parliamentary body either at national or at EU level.
14. The main points of the IIA are:
a) Agreement to provide at least EUR 1 740 million for the period 2007-2013 (i.e. an average of about 250 million per year)
b) Special procedure for CFSP expenditure as part of the annual budgetary procedure is maintained. EP and Council will seek agreement on the annual amount for CFSP expenditure and on its allocation to the budget articles set out in the IIA. The amount of expenditure to cover "real predictable needs".
c) An amount no higher than 20% of this may be budgeted for emergency measures (unforeseen)
d) transmission by Council Presidency of a forward-looking annual report by 15 June, including the financial implications and an evaluation of the measures launched
e) Formalisation in the new IIA of the joint consultation meetings. New elements include that Council is represented at ambassador level and that there will at least five meetings per year.
f) Maintenance of provisions on quarterly reports and the transmission of financial statements within 5 days following a decision on a CFSP action by the Council.
Maintenance of the budgetary structure (see annex 1)
Financing of the CFSP
15. The perhaps most important trend relates to the increase of crisis-management operations with both civil and military components. This means that it has become even more important than ever to clarify the financing in this respect.
Current situation
16. Civilian missions are/have been financed under the CFSP budget whilst missions with military or defence implications have been funded under the principle of 'costs lie where they fall', that is from Member States. Some costs which are defined as 'common costs' can be managed under the so-called Athena mechanism.
17. The Council believes that the civilian components (financed from the budget) need to be made more flexible and to allow for quicker procedures, including as well the possibility of more effective funding of start-up missions and fact-finding missions.
18. From the Parliament's point of view, it has frequently been pointed out that the number of funding options possible is complex, rarely allowing for the possibility to assess coherence and effectiveness. In short, making political and budgetary analyses difficult. The flexibility of procedures must also be weighed against openness and accountability.
19. The Parliament's report on the main aspects and basic choices of CFSP (Brok report) calls for 'joint costs' of future military operations in the framework of ESDP to be financed from the EU budget, discontinuing the existing arrangement of Member States subsidiary budgets or start-up funds
Does the new IIA improve matters?
20. The new IIA does not contain any new "automatic" provisions that would immediately solve the problem. However, the provisions in place, thanks to the continued efforts of the Parliament over the last three to four years, should allow for a new phase of confidence-building between the respective institutions and allow for further progress.
21. According to the text of the joint Declaration of 25 November 2002, the Council shall give 'early warning in the context of the regular political dialogue on CFSP actions which might have important financial implications’. The rapporteur notes that the Council has not fully complied with this provision over the past years and stresses the need for improvement. Naturally, the consultation meetings to be held five times a year should be used to this end.
22. It should be pointed out that the text of the IIA as regards the Council's obligation to provide the European Parliament with financial statements could in fact apply to all decisions relating to the CFSP entailing expenditure, i.e. not only expenditure from the EU budget. There has been a difference of interpretation between the two institutions in which the Council claimed (in 2002) that it was valid only when expenditure from the EU budget was involved. However, the text reads "...whenever it adopts a decision in the field of CFSP entailing expenditure, then council will immediately and in each case no later than five working days....". This would certainly imply that also decisions/expenditure falling to the member States should be provided to give a more complete picture.
23. Also in financing terms, there are gradually ever more links to the Union's largest financial interventions, i.e. its aid programmes and other Community instruments in the external field. However, it is not always "clear-cut" as to whether an action can be financed under a 1st pillar instrument or under the 2nd pillar (for example, mine-clearance, civilian emergency assistance, human rights, institution building, election monitoring, consolidation of democracy and the rule of law). In what may be described as a "grey-zone" in both operational and budgetary terms, the links between CFSP and ‘traditional’ external actions clearly justify the request for greater consistency between policies and actions devised under the first and second pillars.
24. It will also be interesting to explore how the proposed set of new External Action Instruments will work in relation to the CFSP chapter in this respect. It is also a question of sound budgetary management and achieving value-for-money. In fact, already in 2001, the European Court of Auditors clearly criticised the fact that similar CFSP actions were funded from different budget lines and subsections and recommended that the financing of CFSP actions should be managed in a more transparent manner.
25. The rapporteur sincerely hopes that the new multi-annual financial framework (MFF) can serve as a "new beginning" in this respect and emphasises that this will be a crucial element to be taken into account in the next few years and in view of the 2008-2009 review of the MFF.
The case of EU Special representatives
26. At the beginning of 2006 the Council decided to extend until 28 February 2007 the mandate of eight EUSRs (Bosnia Herzegovina, Central Asia, Middle East Peace Process, Moldova, South Caucasus, Great Lakes, FYROM, and Afghanistan).
27. In accordance with the current IIA of 6 May 1999, the European Parliament received copy of the financial statements for the Council Joint Actions extending these mandates. At the last joint meeting with Council Parliament members clearly considered that these texts did not provide any evaluation of the activities carried out by the EUSRs.
28. There is a need to discuss further the criteria for the appointment EUSRs, the definition of their tasks, lengths of their mandates and the complementarity and coordination with the Commission delegations and work/instruments under the first pillar. During the 2006 budgetary procedure the Committee on Foreign Affairs requested that Council establishes clear guidelines for the establishment of EUSR posts. Such guidelines should provide criteria for assessing the added value of Special Representatives. What actually defines the need and the success of a mandate?
29. At the joint meeting in question the Council presidency indicated that:
(a) EUSRs were an expression of the EU political priorities and an important CFSP instrument for ensuring political consistency towards a particular geographical area;
(b) They provided political steering to CFSP/ESDP missions;
(c) (Where there was no CFSP/ESDP mission) they provided visibility to the Union and promoted a coordinated regional approach (e.g. in Central Asia)
30. On a specific question by MEPs why the Commission's Delegations could not carry out the same work the presidency indicated that:
(a) When they were dealing with an entire region, EUSRs were often called upon to travel frequently (something which would hardly be compatible with the duties of EC Ambassadors, who were in charge of Community Assistance and Cooperation in relation to a given country).
(b) When they were in charge of a CFSP/ESDP mission they could not be replaced by a Commission official since these missions involved a different chain of command (EUSRs were accountable to the Political and Security Committee and Mr Solana - not to the Commission).
31. These indications on the Council's part do not lessen the need for objective means to assess the advisability of creating EUSRs and a more thorough/objective assessment of their work and the financing requested from the budget.
32. As for the costs of the EUSRs, in 2004 five of them were financed from the EU budget to the tune of EUR 3, 1 million. In 2006, the amount is EUR 7, 5 million for eight of them. The average cost to the EU budget has therefore increased from EUR 0, 6 million/year/envoy to 0, 9 million, an increase in costs of 50%. Can this be fully accounted for by a shift from MS financing to EU budget financing for some costs? Which?
33. The 2007 PDB again proposes a doubling of appropriations for EUSRs. The proposed figure is EUR 14 million, i.e. an increase of + 448 % in two years.
Some questions for the hearing
· CFSP/ESDP operations are evolving at quite a quick pace and, also, considering the more than doubling of financing foreseen (average level of about 250 million/year over 2007-2013) these will become politically more significant and much more visible. Is it likely that the Council will increasingly seek and need the support of Parliament not only for another million here or there, but, also at the political level?
· There is a trend to carry out more and more mixed missions, i.e. combined civil and military operations. Is it not essential to continue to develop our structures for democratic scrutiny of such measures and their financing? Should these also encompass funding from Member States budgets?
· How can the framework of consultation/information between Parliament and Council (built around the provisions of the new IIA) best be used to promote a "new beginning" of confidence-building between the Institutions on CFSP matters?
· In the same vein, how could we continue to develop democratic scrutiny at the policy level? How can this best be achieved within the current framework? Could the Council and the Commission eventually consider presenting real "needs assessments" for proposed actions?
· The need for a new and more structured approach to the EUSRs has been called for. The proposed budget increases in the last two years have been dramatic. What can be done to allow the Parliament better opportunities to objectively assess the rationale and appointments in this field?
How could efforts be focussed to ensure a coordinated and consistent development of Community instruments and the instruments available under the CFSP/ESDP, in order to promote consistency between them and ensure coherence within overall external action strategies?
on development issues
"Poverty is the parent of revolution and crime"
Aristotle (384 - 322 B.C.)
1. This working document sets out the objectives of EC development assistance and the funds available to that end, notably in light of the new multi-annual financial framework (MFF) that is due to be adopted at the May Plenary session of the European Parliament. The working document considers how EC development assistance has traditionally been allocated and considers some themes for further analysis in this area. These topics may be discussed at the 29 May hearing on external aspects of the 2007 budget procedure.
Background
What are the objectives of multilateral development assistance?
2. The Millennium Development Goals (MDGs) agreed among UN members in the UN Millennium Declaration of 2000 form an over-arching set of objectives for the multilateral development policy. The MDGs are:
(a) Goal 1: Eradicate extreme poverty and hunger
(b) Goal 2: Achieve universal primary education
(c) Goal 3: Promote gender equality and empower women
(d) Goal 4: Reduce child mortality
(e) Goal 5: Improve maternal health
(f) Goal 6: Combat HIV/AIDS, malaria and other diseases
(g) Goal 7: Ensure environmental sustainability
(h) Goal 8: Develop a global partnership for development
What are the objectives of EC development assistance?
3. Article 177 of the Treaty of the European Community (EC) sets three objectives for EC development policy:
· the sustainable economic and social development of the developing countries, and more particularly the most disadvantaged among them;
· the smooth and gradual integration of the developing countries into the world economy;
· and the campaign against poverty in the developing countries.
The EU has also signed up to the above-mentioned MDGs on a number of occasions.
What funds are available for EC development assistance?
4. The EU as a whole – Community and Member States – provides more than half of all global official development assistance: over €34.5 billion in 2004, representing 0.36% of GNI. One-fifth of the EU’s current aid budget – €6.9 billion in 2004 – is managed by the European Commission on behalf of the Community. This includes the European Development Fund (EDF), which accounted for outside of the Community Budget. The 9th EDF provides EUR 13.5 billion for African, Caribbean and Pacific partner countries. The geographical span of the Community’s assistance programmes is global, from the EU’s immediate neighbours to developing countries in all regions of the world.
How is EC development spending distributed geographically?
5. It is not straightforward to measure precisely how much development assistance is provided per geographical region, but an approximate breakdown is provided for in the Commission's Annual Report 2005 on "The European Community's development policy and the implementation of external assistance in 2004". This report states that in 2004, on the basis of budget payments, the breakdown was as follows:
Region |
Payments (EUR million) |
Share of payments |
|
ACP |
2464 |
40% |
|
Mediterranean |
1125 |
18% |
|
"Thematic" |
797 |
13% |
|
Asia |
526 |
8% |
|
The Balkans |
510 |
8% |
|
Newly-independent States |
359 |
6% |
|
Latin America |
314 |
5% |
|
South Africa |
116 |
2% |
|
Total |
6211 |
100% |
|
6. Payment levels have trended closer to commitment levels in recent years for specific programmes as a result of a programme of "deconcentrating" the way in which EC development aid is disbursed, by giving a greater role to EC Delegations in third countries. Of course, payments that are closer to commitment ceilings leaves less scope for re-distributing funds between regions and programmes.
7. The third row in the table is allocated to "thematic" spending. This clearly does not refer to any specific geographical region, but rather to development assistance spent on thematic programmes that focus on cross-cutting issues such as human rights, preservation of natural resources and good governance.
Aid for Trade - the EUR 1 billion pledge
8. In the context of the 2005 G8 Summit, European Commission President Barroso pledged that the Commission would provide EUR 1 billion in aid for trade payments by 2010 from EC development assistance. It can be argued in this context that in order for this commitment to be accounted for accurately, a thematic budget line for trade-related assistance should be created. In the absence of such a thematic budget line, the overall figure for annual EC trade-related assistance will be produced through an aggregation derived from spending on trade assistance in national country programmes.
9. The aid for trade pledge raises two interesting issues. First, the debate about the need for a thematic budget line to account accurately for aid for trade spending raises a trade-off between, on the one hand, transparency of political commitments and, on the other, a proliferation of thematic budget lines for the various horizontal objectives of development policy. Second, there is the issue of the coherence between Community spending relative to spending by other bilateral and multilateral donors. The World Bank's emphasis on Poverty Reduction Strategy Programmes (PRSPs) agreed at a national level with developing partner countries are particularly relevant in this regard.
Next steps
How will EC development spending be affected by the new MFF?
10. The reorganisation of the headings for the new financial perspective make it somewhat difficult to make direct comparisons between future spending on development assistance in the 2007 - 2013 MFF relative the 2000 - 2006 Financial Perspective (FP). As an overall guide, EUR 50 billion is foreseen for Heading 4 "The EU as a global partner" over the period 2007 - 2013. Development cooperation is projected to account for some EUR 15 billion (around 30 percent). One must note, however, that the EDF and the Emergency Aid Reserve are outside of the 2007 - 2013 MFF. Further the European Neighbourhood and Partnership Instrument (ENPI), to which over EUR 10 billion is allocated over the MFF, provides assistance to poorer countries on, or close to, the EU's external borders.
The future of EC economic and cooperation instruments
11. Negotiations are ongoing between Parliament, Council and Commission regarding the new external instruments for pre-accession (IPA), neighbourhood and partnership (ENPI) and development and economic co-operation (DCEC). One of the key issues is the legal base for the DCEC. The Parliament intends to amend this programme so that it would cover all developing countries (by OECD/ DAC definition "developing countries" would include China, India, Brazil) that are not covered by the ENPI (Neighbourhood) or IPA (Pre-accession) instruments. A key question is whether the legal base for will cover only development cooperation (Art 179 of the Treaty) or also economic, financial and technical cooperation (Art 181 of the Treaty). A dual legal base would give the Commission a freer hand to spend assistance money on economic, financial and technical cooperation with (e.g.) China, but could, as a consequence, reduce money available for development assistance.
Key themes
12. As referred to earlier in this working document, the European Commission has devoted major efforts in recent years to "deconcentrating" the level at which development assistance is spent. This has given a greater role to EC Delegations in third countries. The higher rates of development assistance spending as set against commitment appropriations does, of course, also reduce the scope for shifting payments between budget lines for different regions/ projects according to evolving requirements.
13. The coherence agenda is about ensuring that the efforts of the various stakeholders are mutually complementary and reinforcing. The objective is thus to reduce overlapping work or mutually inconsistent goals. Coherence between actors can be analysed at a number of levels and across policy areas and policy actors.
Some questions for the hearing
· How effective has spending on development assistance been during the 2000 - 2006 financial perspective? What improvement should be made and incorporated into future development assistance programmes?
· How successful has deconcentration been in improving the effectiveness and efficiency of EC development aid spending?
· What further work is needed to ensure the coherence of EC development assistance with that provided by national (notably EU member states) and multinational donors (notably the UN system)? What scope is there for best-practice learning between donors and for effective co-operation, for instance between the EU and US?
· What more can be done to ensure that public and private (NGOs, benefactors) assistance is provided in complementary ways, for example in the area of education policy?
· What can be done to streamline the way in which politicians and officials in recipient developing countries interact with politicians and officials in donor governments and organisations? That is to say, how can governance of the overall system be improved?
How can coherence be ensured between development policies and policies in other spheres, such as trade policy or environmental policy?
on the promotion of democracy and human rights
"Energy and persistence conquer all things"
Benjamin Franklin (1706 - 1790)
Background
1. Since the latter part of the 1980s, as democratic transition spread through various parts of the world, there has been a rapid and significant expansion in assistance programmes financed by the European Union and other major donors to support the development of human rights and democracy (HRD). This was also incorporated as a specific goal in the EU treaties. The overall purpose of these programmes has been two-fold:
(a) to promote HRD for their own sake, as a political good that will improve the lives of citizens by bringing more freedom, political representation and government accountability;
(b) to support the idea that the promotion of human rights and democracy is an essential part of the process of furthering sustainable social and economic development.
2. Most of the Council Regulations adopted in the area of external aid included HRD related objectives; in 1994, at EP´s request, the "European Initiative for Human Rights" (EIDHR) was launched by gathering together resources explicitly earmarked for the promotion of HRD (mainly from geographic regulations : Phare, Tacis, ALA, MEDA, ).
3. In 1999, in order to create the necessary legal basis for external actions and the implementation of budgetary funds, the Council adopted 2 regulations (975/1999 for developing countries, 976/1999 for third countries). These expired at the end of 2004 but were prolonged until the end of 2006, this time with one of them (developing countries) under the co-decision procedure.
4. In the past, (since 1980), the Commission had engaged an external foundation, the European Human Rights Foundation (EHRF), to provide technical assistance in the management of several of the human rights budget lines. When, in 1992, Parliament created the Phare Democracy Programme, to which later was added the Tacis Democracy Programme, an "Advisory Council" of representatives of the Commission, Parliament, Council of Europe and G24 (an intergovernmental grouping of developing/third countries) was created.
5. Following the introduction of the 1999 Regulations, which instituted a management committee of the Member States (comitology), the Commission abolished the Advisory Council. The EHRF was still contracted to provide technical assistance to the "Common Service"( subsequently transformed into Europe Aid) in the management of all the human rights budget lines within chapter B7-7 (approx. EUR 100m per year), from April 1999 until May 2001. At that point, management was "internalised" within Europe Aid, and the Commission ceased collaboration with EHRF.
Today's programme
6. Democracy and Human Rights actions within the EU budget are still implemented in various ways. On the one hand, the European Initiative for Democracy and Human Rights (EIDHR) has a separate budget chapter (19 04, ex B7-70) and is financed at a level of EUR 123 million in 2006.
7. On the other hand, various actions related to democracy and human rights are in fact carried out under the geographical cooperation programmes. These are not open to the same degree of visibility and insight to the Parliament, at least in budgetary terms.
8. In general, the EIDHR is a programme supporting civil society actions, not necessarily subject to official approval by third country authorities (although this may also be the case). The geographical programmes operate within a programmed framework agreed with the country in question, often financing institutions of that country in areas such as 'good governance', strengthening of justice systems, police systems etc.
9. The question of a lack of coordination between the two has often been raised, as has the question of insufficient coordination with EU Member States and with other donors and international organisations.
10. As for the EIDHR, following the adoption of the legal bases in 1999[15], some budgetary consolidation took place in terms of budget lines and nomenclature. Since that time, the budgetary trend for the EIDHR has been fairly stable and the programme has been given high priority and visibility in the budget procedure. Commitment appropriations for chapter 19 04 have been voted as follows (not including any subsequent transfers). It should be noted that the 2007 PDB figure may not be directly comparable to previous years as the budget nomenclature changes.
(EUR million)
PDB 2007 |
2006 |
2005 |
2004 |
2003 |
2002 |
2001 |
2000 |
||
130,7 |
122,7 |
120,4 |
125,6 |
106,0 |
104,0 |
102,0 |
94,8 |
||
Are any new actions included, other than the EIDHR of previous years? |
|||||||||
For 2006, more than EUR 105 million out of this is entered on the main line 19 04 03: Development and consolidation of democracy and the rule of law - Respect for human rights and fundamental freedoms[16]
11. It could be noted that the level slightly above 100 million in fact corresponded to the indicative financial envelopes included in the two Council Regulations. The "jump" in funding in 2004 was decided by the Parliament (against the proposals of Commission and Council) and was actually possible since the programme was not fully co-decided.
12. The EIDHR's main budget line (19 04 03) is implemented following calls for proposals and centres around four main 'campaigns". A number of recipient countries have also been chosen, but it is not clear according to which criteria.
13. The EIDHR, perhaps less known, also provides some direct funding to international organisations. This is often criticised by the NGOs. They question why an instrument like the EIDHR should provide core funding for the Office of the High Commissioner for HR in Geneva (UN) ? Or "targeted projects" to support to UN projects?
14. It should be emphasised that for the period 2007-2013, the Parliament has insisted that a separate legislative proposal for a Democracy and Human Rights Instrument be presented. This will need to be financed under the global agreement for heading 4 of the new multi-annual financial framework (MFF) as agreed by the budgetary authority.
15. The Commission's PDB 2007 presents the human rights actions separately (chapter 19 04) in terms of budget nomenclature, but as part of the four main instruments in legislative terms (in accordance with the Commission's original proposal for the new external instruments). The overall level of appropriations is EUR 130, 7 million.
The strengths and weaknesses of the EIDHR
16. While in no way pretending to be exhaustive, the rapporteur wishes to highlight some of the traditional points that have consistently been mentioned in relation to the EIDHR.
Positive points
17. It is generally believed that strong feature of the programme is its (potential) ability to support actions which do not necessarily have the consent of "local" governments. Needless to say, this can often be the case in countries in which even the very existence of democracy and human rights work might be banned or strongly discouraged. This positive element however does not seem to be used very often in practice.
18. The previous re-grouping of budget lines and the EP's demand for a separate regulation would allow for greater visibility in this area which traditionally is a political priority for the Parliament
19. There could be a potential to achieve better value-for-money and more relevant projects if the opportunity to make a success of the "deconcentration" process of the Commission is taken. In this way, projects should increasingly be identified and approved al EC delegation level (rather than centrally in Brussels). It should provide for better local coordination between donors and, also, cut down on administrative burdens.
Negative points
20. On the strategic level, question marks have been raised as to the long-term impact of funding (sustainability over time) as financing is predominantly dispersed for individual projects over a short period of time. It has been pointed out in various evaluations, that it is difficult to discern any consistent strategy and that financing has been spread far too thinly to reach a "critical mass" of real impact.
21. The programme has been bedevilled with serious problems as regards administrative procedures, especially concerning tendering procedures and delays. In an effort to address a situation in which budgetary funds could be lagging almost two years behind (i.e. appropriations voted for one year, say, 2003 would at best start to be implemented at the end of 2004), the Commission took the (unusual) decision to "merge" the 2005 and 2006 calls for proposals for the main budget line, with a view to a "fresh start" by 2007. This was apparently related to huge delays for the 2005 call. In some ways, it seems that a successive number of internal Commission reorganisations have not yet had any positive impact.
22. The general budgetary work of the Commission in terms of more modern forms of evaluation of activities (using indicators to measure performance and value-for-money) seems to be lagging behind in this area. Questions have been raised as to how lessons learned are fed back in order to contribute to the qualitative improvement of the programme.
Possible link to the review of the Financial Regulation
23. The rapporteur wonders whether the reform of the Financial Regulation might be an opportunity to address some of the administrative problems and delays encountered in the EIDHR?
24. The EP, on 15 March 2006, adopted various amendments that could be relevant.
In general, the principle of proportionality of administrative action is highlighted (the required checks should be proportionate to the amounts and risks involved). A number of specific amendments are also introduced for the general section on grants.
25. The Commission's DG Budget is currently working on a modified proposal apparently taking on board either in full or in part the amendments of the Parliament.
26. It would be interesting to know the position of the Commission as regards the rules for sensitive funding decisions in this area, which could involve organisations that are banned or under severe threat from their respective governments. Would the Commission be ready to act in such difficult circumstances?
The future
27. The rapporteur underlines that it will be the legislative responsibility of the competent committees to decide on the future characteristics of a new instrument in this field, which should be able to respond to growing external challenges for the new financing period 2007-2013.
28. Clearly, some of the priorities here are closely linked to the other external instruments. Questions arise such as how can procedures and flexibility be improved to enhance effective implementation of programmes; how can the EP ensure that its legislative powers are not eroded and how can it play a strategic role in the definition of priorities and allocation of funds.
29. In parallel, some proposals have been discussed as to whether it would be feasible/desirable to create a "European Foundation", possibly drawing inspiration from the US model of a "National Endowment for Democracy". Presumably, such a foundation would operate independently and separately from the legal instrument (Regulation) to be adopted. There is therefore a question mark over how such a foundation would operate and be funded.
30. While not wishing to comment prematurely on the substance of the issue, it seems important to highlight some budgetary issues:
- Would such funding be provided from the general budget of the EU?
- Would it be provisioned from the new Regulation?
- If so, could funding be earmarked in this way given the rules of the Financial Regulation?
-What would be the implications in terms of the Commission's treaty-bound responsibility for implementing the budget?
- What are the implications in terms of the discharge procedure for the EU's budget?
- How could it be ensured that the budgetary scrutiny role of Parliament would not be compromised?
-Would the general rules for Agencies apply to a "Foundation"? Would the Foundation act as an "implementing agent" of EU budget funds?
31. Another, separarate, issue for the creation of a different type of "foundation" in the human rights field has also been discussed. Here, the pool of experience of MEPs should be better utilised for electoral observation missions, delegations, parliamentary assemblies etc. It remains to be seen how this initiative will develop and how the budgetary implications would be taken into account.
Some questions for the hearing
What particular measures should be put in place to significantly improve the implementation of the human rights actions within the context of existing funds, especially as concerns coordination between actions and donors?
Is it the case that the EIDHR is not really underpinned by an overarching strategy but, rather, funds a wide variety of individual projects thus spreading scarce budgetary resources too thinly?
How can the need for financial accountability be married to the clear need for less bureaucratic procedures in this field, sometimes involving funding of democracy organisations/ civil society organisations that are not recognised in their respective countries?
How can the impact of funding going to human rights and democracy be improved within the new multi-annual financial framework, ensuring a better cost/ benefit relationship?
Should the idea of a European Foundation be pursued? Is it compatible with the Financial Regulation now in place?
on PDB 2007 - First analysis
"The best thing about the future is that it only comes one day at a time" - Abraham Lincoln
Introduction
1. The Preliminary Draft Budget (PDB) 2007, adopted by the Commission on 3 May, is the first for the multi-annual financial framework (MFF) 2007 - 2013. The PDB 2007 is for an EU of 27, including Romania and Bulgaria. If the accession of either of these two candidate countries is delayed, then an amending letter will need to be presented. This working document provides an initial summary of the main elements of the Commission's proposal. The document focuses on changes in planned spending between PDB 2007 and the 2006 budget (B2006), and new programmes in this MFF and PDB.
Key figures by 2007 - 2013 Multi-annual Financial Framework Heading
2. The Working Document is organised according to the new headings in the 2007 Budget. These are the headings agreed in the 2007 - 2013 MFF. The headings are set out in tables 1a and 1b below. These new headings are different from the headings in the previous 2000 - 2006 Financial Perspective (FP). This often makes direct comparisons between the PDB 2007 and the B2006 figures difficult. Further, the new MFF includes many new programmes. These new programmes sometimes become "umbrella" programmes that cover spending under pre-existing programmes. As in previous budgets, the "Activity-based budgeting" (ABB) approach aims to offer a global view of the cost of the policies. The budget titles, chapters and lines are crucial for the annual budget procedure. However, spending on a given budget chapter, or policy area, can also be spread across a number of Headings.
Summary of the 2007 PDB figures by MFF heading
Table 1a - Overview of PDB 2007 - commitments (EUR million, current prices)
Heading |
2007 (EU 27) commitments |
% change on 2006 (EU 25) |
MFF ceiling |
Margin |
|
1a Competitiveness for growth and employment |
8 796,1 |
+11,5% |
8 918 |
121,9 |
|
1b Cohesion for growth and employment |
45 486,6 |
+14,8% |
45 487 |
0,4 |
|
2 Preservation and management of natural resources |
57 217,6 |
+1,2% |
58 351 |
1 133,4 |
|
3a Freedom, Security and Justice |
571.3 |
+4% |
637 |
65,7 |
|
3b Citizenship |
603,1 |
-1,4% |
636 |
32,9 |
|
4 The EU as a global partner |
6 702,5 |
-20,2% |
6 578 |
110* |
|
5 Administration |
7 002,3 |
+6% |
7 039 |
112,7* |
|
6 Compensation |
444,6 |
-58,6% |
445 |
0,4 |
|
Total |
126 824,1 |
+4,6% |
128 091 |
1 577,4* |
|
Source: Based on data from the European Commission's PDB 2007 documents
3. As a result of these overlapping categories, care must be taken when examining the PDB that comparisons across years and between new and old programmes are "like with like". This working document only presents an overview. Further work will be needed to explain fully the linkages between the PDB 2007, B2006, and the new MFF Headings.
4. Table 1a sets out the commitment appropriations budget for 2007 as per the PDB. The total stands at EUR 126 824 million, which is an increase of 4,6% on B2006, based on a Commission estimate of B2006 appropriations expressed in terms of the new MFF Headings. According to Commission data, the commitments total is equivalent to 1,08% of EU GNI. Annex I to the new Inter-Institutional Agreement (IIA), the Böge report on which was adopted in Plenary on 17 May 2006, sets a ceiling on commitment appropriations of 1,10% of EU GNI.
5. The Commission states in the PDB that the margin remaining within the MFF ceilings is EUR 1 577 million. The margin figures for Heading 4 and for Heading 5 are asterisked (*) in the table because there is an apparent disparity in each case between the commitments, the ceiling and the margin. The margin for Heading 4 does not take into account the appropriations related to the Emergency Aid Reserve of 234,5 million, which is outside of the MFF. The margin under the heading 5 ceiling also includes EUR 76 million from staff contributions to the pension fund.
Table 1b - Overview of PDB 2007 - payments (EUR million)
Heading |
2007 payments (EU 27) |
% change on 2006 (EU 25) |
|
1a Competitiveness for growth and employment |
6 943,5 |
-6,5% |
|
1b Cohesion for growth and employment |
37 790,3 |
+19,1% |
|
2 Preservation and management of natural resources |
55 683,4 |
+0,4% |
|
3a Freedom, Security and Justice |
427,0 |
-19,9% |
|
3b Citizenship |
679,6 |
+8,9% |
|
4 The EU as a global partner |
7 447,5 |
-13,8% |
|
5 Administration |
7 002,1 |
+6,0% |
|
6 Compensation |
444,6 |
-58,6% |
|
Total |
116 418,1 |
3,9% |
|
Source: Based on data from the European Commission's PDB 2007 documents
6. Table 1b sets out the payments in the PDB 2007. The overall total for payment appropriations is EUR 116 418 million, an increase of 3,9% compared to 2006. This is 0,99% of EU GNI. For payment appropriations, Annex I to the IIA sets a ceiling of 1,06% of EU GNI. There is therefore considerable margin remaining within the payments budget.
7. The working document now covers: the implications of the new inter-institutional agreement (IIA) for the 2007 Budget; the rapporteur's general comments; a summary of the PDB by MFF Heading; and a final section on horizontal issues, such as agencies, pilot projects and preparatory actions.
The implications of the new IIA for the 2007 budget
8. The IIA between the European Parliament, the Council and the Commission on Budgetary Discipline and Sound Financial Management signed on 17 May 2006 paves the way for an orderly development of EU expenditure over the coming years. Although it foresees fixed annual ceilings for commitments and for payments, the MFF is not a multi-annual budget. Sufficient margin to allow the normal evolution of the annual procedure needs to be preserved.
9. Ninety percent of EU legislation for spending programmes terminates at the end of 2006, but not all future programmes will be fixed in 2007, and room should be maintained for new initiatives, annual actions, pilot projects and preparatory actions, and for support to EP's priorities. Most co-decision procedures setting up the new generation of programmes will be finalised at the end of 2006 or in early 2007: the 2007 budget will still offer an opportunity for fine-tuning and serve as leverage for the EP to secure its priorities in the ongoing legislative procedures.
10. A number of provisions set up by the new IIA will be implemented in the course of the 2007 budgetary procedure. The new legislative flexibility (art. 37) of 5% could be used to boost programmes that the EP considers to be positive priorities on the basis of an assessment by the Commission. The rapporteur is of the opinion that part of the margin could be used for that purpose, especially under headings 1A, 3B and 4. The rapporteur wishes to point out that the amounts entered into the PDB for multi-annual programmes remain indicative until the legislative authority has completed the procedures. Therefore, the resulting margins of the various headings could be significantly modified after completion of the legislative procedures.
11. The Globalisation Fund (art. 28) is a new instrument through which up to EUR 500 m can be allocated per year (current prices) through appropriations existing under the global expenditure ceiling of the previous year and/ or from cancelled appropriations from the previous two years, excluding those related to heading 1B. It will have a direct impact on the 2007 Budget concerning the use of the margin left available once the Budget is adopted and for the mobilisation of the Fund in the context of the budgetary procedure. Concerning the margins available, the rapporteur considers that it will likely only be found within agriculture expenditure, i.e. heading 1A until 2006 and heading 2 from 2007 onwards.
12. There are new procedures enhancing transparency and sound financial management in the area of CFSP (art. 42 and 43 of the IIA), the financing of the Area of Freedom, Security and Justice (declaration N° 13), as well as improving the follow-up of financial programming (art. 46). A close follow-up of financial programming will be ensured over the annual procedure and conclusions could be drawn at budgetary level if necessary.
13. According to the IIA, during the budgetary procedure, the Commission should report to the budgetary authority on activities financed by the EIB/ EIF and the EBRD to support investment in Research and Development, TENs and SMEs;
Rapporteur's general comments
14. The rapporteur wishes to recall, as set out in Working Document 2 (para 8) and endorsed by the plenary (A6-0154/2006) on 18 May 2006, that the debate on B2007 should focus on three strands: setting of policy priorities in external and internal policies; ensuring qualitative value for money accompanied by cost-benefit studies; and preparing for the review in 2008/2009.
15. A better matching between the legislative programme and the EU budget for 2007 will also be a priority for the rapporteur, who is in favour of clarifying and linking the procedures for setting egislative and budgetary priorities .Cost-benefit analysis should play an integral part in this better-synchronised process and facilitate effective spending on real policy priorities. The rapporteur is further determined to use all of the possibilities offered by the annual budgetary procedure and by the new IIA to prepare for the 2008-2009 mid-term review.
16. On the overall figures, the rapporteur notes that, according to the provisions laid down by the IIA (article 16), the annual technical adjustment is fixed for the whole period on a deflator rate of 2% a year. The Commission has annexed to the PDB a presentation of the new MFF at current prices. In line with the ceilings fixed by the MFF, the profile of EU expenditure is set to increase in a consistent manner across the MFF for commitments. However, the profile is far more irregular concerning payments, especially for cohesion policy, with a peak in 2008. The rapporteur stresses that a lower level of payments in a given budget year may lead to delays in implementation.
17. Focusing on the figures per heading in PDB 2007 (tables 1a and 1b), and relative to the policy priorities highlighted in his Working Document 2 (para 9), the rapporteur notes that there are some headings under which foreseen appropriations seem low and perhaps insufficient. The rapporteur notes the 14,8 % increase in appropriations on cohesion for growth and employment (heading 1B) and welcomes the 11,5% increase in appropriations for competitiveness for growth and employment (heading 1a), as the Lisbon Agenda was a priority underlined in Working Document 2. However, the rapporteur is concerned by the 20,2% decrease in appropriations under Heading 4 (the EU as a global partner). He further notes that there appears to be little re-direction of funds towards tackling the challenges outlined in his Working Document 4. The security dimension and the need for a more efficient communications policy were also priorities in Working Document 2: these areas of spending do not see major changes in overall spending in the PDB 2007 relative to B 2006. In the rapporteur's view, the margins left under the different headings already appear to be insufficient, especially for heading 3B and 4, to face the ambition of the Union in those areas.
18. The Commission has presented the PDB based on an EU with 27 countries in line with the next MFF, no formal decision on enlargement to Bulgaria and Romania has yet been taken. The rapporteur is of the opinion that the budget should not anticipate political decisions but rather endorse them. Therefore, the Commission should indicate separately the expenditure foreseen for EU-2 in order to preserve the rights of the budgetary authority in the context of an Amending Letter to be presented by the Commission if enlargement becomes effective before Parliament's second reading.
Heading 1a - Competitiveness for growth and employment
Overview
19. This sub-heading encompasses the key policies in achieving the Lisbon Strategy, with a focus on economic growth and more and better jobs for European citizens: a priority for this MFF. One would therefore expect to see an increase in spending in this area in the PDB. The proposed commitment appropriations for this heading (EUR 8 796 million) do indeed increase by 11,5% when compared to B2006. However, the payment appropriations (EUR 6 944 million) decrease by 6.5% compared to 2006.
20. The main drivers for the gap between increasing commitments and decreasing payments would appear to be in the areas of Research and Trans-European Networks (TENs). In both of these areas there is a large gap between commitments and planned payments in the PDB. For example, in the Preliminary Draft Budget Summary 2007 prepared by Parliament services, commitments for the Seventh Research Programme are EUR 5 486 million, but payments are only EUR 3 977 million. This is driven by the fact that there is a time-lag before appropriations translate into commitments as it takes time to set up spending projects within new programmes. Specialised committees may wish to examine this issue further.
21. Appropriations in heading 1a are spread across a range of policy areas (also sometimes referred to as budget "titles"). In the PDB, Heading 1a appropriations include: economic and financial affairs; enterprise; employment and social affairs; research; information society and media; direct research; fisheries and maritime affairs; internal market; taxation and customs union; education and culture; fight against fraud; administration and statistics. There are also p.m. notes/ lines such that appropriations could be made under regional policy, trade and budget. The remainder of the section looks at the major programmes and spending areas.
Competitiveness and Innovation
22. An overall amount of EUR 388 million is proposed in the PDB for the new Competitiveness and Innovation Programme (CIP). Actions funded under this programme will mainly aim at:
- fostering entrepreneurial initiatives/ innovation and small business development;
- completing, improving and managing the internal market;
- preserving and enhancing the competitiveness of industry;
- information society;
- sustainable economic growth including energy.
23. This is spread across entrepreneurship and innovation (EUR 268 million), CIP Information and communications technology (ICT) policy support (EUR 54,7 million) and CIP intelligent energy (EUR 65 million) The pre-existing Intelligent Energy - Europe Programme is now included in the CIP. It is focused on security of energy supply, competitiveness, proper implementation of the energy regulatory framework, facilitating investment, energy efficiency, renewable energy sources, energy diversification, transport and awareness raising.
Research
24. Research was one of the areas that saw an increase in funding during the negotiations on the MFF 2007-2013. The 7th Research Framework Programme is a key element of this sub-heading. 2007 is in the first budgetary year of the 7th Research Framework Programme, the main objectives of which are reflected in the different specific Programmes:
Cooperation (research activities in trans-national cooperation);
Ideas (new - excellence through competition);
People (skills and career development);
Capacities (use and development of research infrastructure).
25. As noted above, it there is such a large gap between commitment and payment appropriations for research in PDB 2007. More generally, further analysis is required in order fully to understand how the structure of spending on research is due to change in 2007 as a result of the start of the 7th Framework Programme and the changes to budgetary heading within the MFF.
Education
26. The new Lifelong Learning Programme comprises: Comenius (secondary education); Erasmus (tertiary/ university education); Leonardo da Vinci (vocational training) and Grundtvig (adult learning) in addition to language-learning and ICT projects and the Jean Monnet programme. There is a significant increase planned in 2007 relative to 2006. Commitments rise by 29,6% in the PDB to around EUR 904 million.
Trans-European Networks
27. The PDB foresees increased commitment appropriations (+17.7% relative to B2006) at EUR 853 million for Trans-European Networks, as a key to increased integration and competitiveness. Priorities proposed are: European Rail Traffic Management, European Air Traffic Management Master Plan, River Information Services and TEN loan guarantee instrument. Apart from those, a new Indicative Multi-annual Programme is being launched, which will focus on the development of cross-border sections.
Galileo
28. The PDB includes appropriations for EUR 100 million for the Galileo satellite project. This is a new area of spending that did not exist in FP 6.
Social Policy
29. Additional financing has been proposed for the Social Policy Agenda. The Commission requests commitment appropriations to be raised by 8.4% as compared to 2006, to reach a level of EUR 156.8 million in 2007. A new programme for Employment and Social Solidarity (PROGRESS, 2007-13) integrating existing programmes in the area accounts for a major part of the increase. According to the Commission (PDB document II, page 19) appropriations under title 04 "employment and social affairs", chapter 04 "employment and social solidarity" are planned to rise by 11,75% to EUR 125 million.
European Globalisation Adjustment Fund
30. One should also note the planned creation of the European Globalisation adjustment Fund (budget line 04 05 01). This is intended to deal with some of the negative impacts of the process of globalisation. Implementation of the Fund would be via amending budgets. As per the results of the IIA negotiations, it is intended to finance the new Fund outside of the MFF through unspent appropriations.
Heading 1b - Cohesion for growth and employment
Overview
31. Heading 1 b covers the Structural Funds: European Regional Development Fund (ERDF) and the European Social Fund (ESF) plus the Cohesion Funds. It relates to the following policy areas: regional policy, employment and social affairs. The Commission puts emphasis on the contribution that the new Structural and Cohesion programmes can make to achieving the Lisbon goals.
32. According to the PDB the funding under this heading will be distributed in the following way. For the Structural Funds EUR 38 365 million for commitments and EUR 32 843 million for payment appropriations are foreseen. For the Cohesion Fund EUR 7 122 million for commitments and EUR 4 947 million for payment appropriations are planned. There will be essentially no margin available within sub-heading 1 b due to a clear spending target.
33. For the period 2007-2013 the overall envelope for the Funds will be split between three objectives:
· convergence: this objective covers regions whose GDP per capita is below 75% of the EU average
· regional competitiveness and employment: this objective covers all those Objective 1 regions lying outside the Convergence objective.
· territorial co-operation: this objective aims at funding cross-border and trans-national cooperation on a range of actions linked to the Lisbon and Gothenburg agenda (including networks of exchange, analyses and studies between regions and local authorities).
34. The Commission highlights that the proposed division of commitment appropriations between the two funds presented for 2007 is provisional as it is the result of an extrapolation on historical data of the present programming period. It will be reviewed in the light of the results of the negotiations with the Member States on their new National Strategic Reference Framework and Operational Programmes for the period 2007-2013.
Structural Funds
35. A direct comparison between the Structural Funds in 2006 and 2007 is not straightforward due to the changes in the financial framework: The Structural Funds now only comprise the ERDF and the ESF, whereas in 2006 the EAGGF guidance and the Financial Instrument for Fisheries Guidance were also included (the latter now form part of heading 2).
Cohesion Fund
36. The increase of the total commitments for the Cohesion Fund (18%) is fully accounted for by an increase in commitments for the new Member States and the allocation for Bulgaria and Romania. For EU-15 the Cohesion Fund allocation has even fallen by 24%. The new Member States together with Bulgaria and Romania now account for some 70% of the Cohesion Fund.
Priorities for 2007
37. As for the priorities for 2007, the Commission points out that the overall priorities for funding by the Structural Funds and the Cohesion Fund are set out in the draft Structural Fund regulations and the Community Strategic Guidelines, which govern which types of intervention are considered eligible for Community funding. However, the precise allocation of funding to different priorities and projects will depend on the actual programming that is undertaken by Member States during the course of 2006 and 2007. Therefore, the Commission is of the view that the principal priority for 2007 will be to ensure adoption and agreement of programmes for the period, building upon the Community Guidelines and the National Strategic Reference framework that Member States will agree with the Commission for the period 2007-2013. Apart from this, the preparation of the closure of 2000-2006 programmes will be a main objective. DG Regional Policy will continue the implementation of 2000-2006 European Regional Development programmes (around 380 programmes and 215 major projects) and Cohesion Fund projects. The payment of these programmes will last until the end of 2008, and the related reporting until 2010.
Heading 2 - Preservation and management of natural resources
38. This heading covers most of the spending in the policy areas of agriculture, fisheries and environment and a large chunk of the money allocated to health and consumer protection. As such, Heading 2 is the largest heading in the PDB 2007 in money terms. Overall commitments (EUR 57 218 million) and payments (EUR 55 683 million) change little relative to B2006: the respective percentage increases are +1,2% for commitments and +0,4% for payments. There are, however, some significant changes beneath these headline figures.
39. A large proportion of the spending within this heading is of a compulsory nature, on which the Council has the final say in the annual budget procedure. A cursory analysis, by budget line, conducted by the Parliament's services indicates that about 78,25 % of requested spending under heading 2 in PDB 2007 is of a compulsory nature. Further analysis will be required to set out precisely where the Parliament has greatest political purchase within this heading, but it is not accurate to say that all spending under Heading 2 is "compulsory".
40. The overall margin under this heading between the MFF ceiling and 2007 commitments is EUR 1 113 million. If the Commission wishes to exceed this level, or if it wishes to modify the PDB in a major way during the course of the year due to market development, then it would need to present an amending letter.
Agricultural expenditure
41. The Common Agricultural Policy (CAP) has undergone significant changes in recent years to shift support to farmers towards direct payments and away from the most market-distorting measures. The structure of spending on agriculture has changed in significant ways. The Commission notes in the PDB that 90% of direct payments to farmers are now de-coupled from production.
42. However, the aggregate figures remain very large. In its PDB document II, which analyses proposed spending by policy area, the Commission states that (page 21) intervention in agricultural markets (chapter 02) and direct payments (chapter 03) is projected to account for EUR 43,7 billion in appropriations in total. This is 35% of overall appropriations in PDB 2007. Rural development (chapter 04) accounts for a further EUR 12,3 billion in appropriations. These three chapters account for virtually all spending within the PDB 2007 title 05: agriculture and rural development.
43. Interestingly, and in line with the shift from market intervention towards direct aids, the percentage decrease in appropriations for interventions in agricultural markets (chapter 02) is very significant between B2006 and PDB 2007: a reduction of almost one-third from EUR 8 508 million to EUR 5 698 million. The Commission states in the PDB that this is mainly due to changes in the market arrangements for milk and sugar. However, this reduction is more or less exactly offset in terms of absolute amounts by the increase in direct aids (chapter 03): from EUR 34 817 million to EUR 37 661 million, which is an increase of just over 8%. This is due mainly to the continued phasing in of payments to the newest member states (EU-10).
44. Modulation is being applied at a rate of 4% (compared to 3% in 2006) to all direct aid in the EU 15 with the exception of aid granted to ultra-peripheral regions. The net modulation amount is EUR 984 million.
45. The main point to note regarding rural development (Title 05, chapter 04) is that spending across 2007 - 2013 will be financed by one single fund: the check European Agricultural Fund for Rural Development (EAFRD). The Commission states that this is a simplification relative to earlier arrangements.
Fisheries
46. In the financial perspective, the fisheries policy was a classical example of an activity which was spread out over nearly all headings. In the new MFF, the fisheries policy is almost entirely included under heading 2, the exception being a small amount (30 million) which is spent under the CAP. The structure has been rationalised into two main instruments, The European Fisheries Fund (EFF), replacing the former FIFG (Financial Instrument for Fisheries Guidance), and a second instrument covering all other areas of the fisheries policy, including the international fisheries agreements.
47. Overall, the fisheries policy is proposed at an amount of EUR 955 million in the PDB, representing a decrease of 10% compared to the EUR 1 062 million in B2006. This decrease is essentially due to a smaller amount foreseen for the EFF compared to 2006. The commitments proposed for the EFF are EUR 571 million (-18%), which corresponds to the advances on new programmes foreseen in this new Regulation.
48. There is an increase of 3,8 % (commitments) for International Fisheries Agreements. The amounts entered in the reserve reflect that agreements are under negotiation for renewal or that new ones are being prepared (this is normal budgetary practice for agreements not yet signed).
Table 2
Int. Fish. Agreements. |
B 2006 |
PDB 2007 |
Difference |
|
11 03 01 (line) |
62 112 000 |
59 221 500 |
- 2 890 500 |
|
11 03 01 (reserve) |
124 849 000 |
134 778 500 |
+9 929 500 |
|
Total |
186 961 000 |
194 000 000 |
+ 7 039 000 |
|
Source: Based on data from the European Commission's PDB 2007 documents
49. The rapporteur recalls that the Commission will update these figures in the traditional autumn Letter of Amendment, reflecting the state-of-play of ongoing negotiations over these agreements.
Environment
50. The four key expenditure items in this area are: climate change; nature and bio-diversity; sustainable management and use of resources; environment and health.
51. The key innovation in terms of the structure of the budget in this area is that the LIFE+ Programme for 2007 - 2013 will become a single financing instrument for the environment and will replace all pre-2007 programmes. The programmed budget for LIFE+ 2007 in the PDB is EUR 241 million in commitment appropriations, according to document II of the Commission's PDB.
52. However, the Commission's PDB document I (page 23) notes that "the increase in required resources from EUR 234 million to EUR 270 million is mainly due to enlargement and ... the implementation of EU environmental policy in the new member states and ... the necessary extension of the Emission Trading Scheme". It would be interesting to have some further explanation of which policies require the greatest additional financing in this context.
Health and Consumer Protection
53. Health and consumer protection is a horizontal policy area or title within the budget. According to the Commission's PDB document II, about EUR 309 million of the overall EUR 544 million of the budget appropriations allocated to this policy area are spent within Heading 2. However, there is very little detail in the PDB 2007 about spending on health and consumer protection within Heading 2.
Heading 3a - Freedom, security and justice
Main figures and comparison with 2006
54. The operational expenditure in Heading 3a Freedom, Security and Justice (not to be confused with Policy Area 18 with the same name) amounts to EUR 571,3 million. The corresponding indent called "Area of Freedom, Justice and security" in the 2000 - 2006 Financial Perspective Heading "Internal Policies" amounted to 549,1 million, which would mean an increase of 4 per cent comparing B2006 to PDB 2007. But is not clear if these two figures can be compared at all as Budget 2007 will see the launch of three new framework programmes in the field of Freedom, Security and Justice: Fundamental Rights and Justice; Solidarity and Management of Migration flows; and Security and Safeguarding Liberties[17].
55. In any event, "ring fencing" the amounts allocated to the area of Justice, Freedom and Security in a specific subheading in the MFF marks the priority given to it and ensures increased visibility and a stable financial basis for policies as the Commission cannot easily reshuffle the budget to other policy areas.
56. The new programmes (for which direct comparison to 2006 is not possible, and so the percentage column, in particular, must be viewed with some caution) are split as follows:
Table 3
|
PDB 2007 |
|
|
Framework Programme /Other Programme /Agencies |
EUR |
% |
|
Fundamental rights and justice |
71 510 000 |
12,5% |
|
Solidarity and management of migration flows |
291 300 000 |
10,1% |
|
Security and safeguarding liberties |
57 490 000 |
51,0% |
|
Other actions and programmes |
78 400 000 |
13,7% |
|
Decentralised agencies |
72 639 000 |
12,7% |
|
Total |
571 339 000 |
100,0% |
|
Source: European Commission's PDB 2007 documents
57. As regards to the presentation of the PDB concerning the general programme "Solidarity and management of migration flows" it is confusing to note that EUR 60 million have been foreseen in PDB2007 for Budget line 18 03 03, although the new specific programme "European Refugee Fund" will take effect as of Budget 2008 only.
The Pilot Schemes in Heading 3a
58. According to the PDB document the three new framework programmes are replacing "a considerable number of smaller financial instruments and a series of preparatory actions and pilot projects". Unfortunately it does not say which are the ones being absorbed by which specific programme. In any event, the politically most sensitive still appear in the PDB2007:
Table 4
Title Chapter Article Item |
PA |
Appropriations 2007 |
Appropriations 2006 |
Outturn 2005 |
||||
Commitments |
Payments |
Commitments |
Payments |
Commitments |
Payments |
|||
18 05 04 |
Completion of preparatory actions for the victims of terrorist acts |
p.m. |
1 200 000 |
2 000 000 |
1 200 000 |
2 000 000,— |
931 036,77 |
|
18 05 06 |
Completion of fight against terrorism |
p.m. |
6 000 000 |
9 000 000 |
7 000 000 |
7 000 000,— |
0,— |
|
Source: European Commission's PDB 2007 documents
Other issues
59. The seventh Framework programme on research (FP7), comprises under part "Co-operation" a budget line called "Security and Space Research". It gets underway in 2007 with EUR 171,7 million in commitment appropriations (Budget line 02 04 01). Although being part of a Framework Programme, the objectives set out for security research in the FP7 proposal are to:
· develop technologies and knowledge needed to ensure the security of citizens from threats such as terrorism and organised crime, while respecting fundamental human rights;
· ensure the best use of available technologies in civil and defence-related areas;
· stimulate the co-operation of providers and users in security solutions.
Heading 3b: Citizenship
60. The PDB has overall commitment appropriations at EUR 603 million (-1.4%). Appropriations are thus broadly stable relative to B2006. Spending in this sub-heading is spread across a variety of policy areas. Education and culture, health and consumer protection, information society and media, enlargement and communication are the main policy areas in which the money is spent. This sub-heading therefore covers a number of issues and programmes of key concern to the citizens.
61. The programmes in this sub-heading include a proposal for a Health and Consumer Policy Programme (appropriation of EUR 79,1 million) that would focus on access to health and consumer information for citizens and include "the creation of a network of high-level flu officials". The proposal looks, at first glance, to cover a wide set of issues. The relevant committee will no doubt look at this proposal closely.
62. Culture 2007 (EUR 41,8 million appropriation) is a new programme that will seek to promote inter-cultural dialogue. Media 2007 (appropriation of EUR 96,3 million) seeks to preserve and enhance European cultural diversity. Youth in action (appropriation of EUR 116 million) aims at promoting active citizenship among young people.
63. This heading also includes an appropriation of EUR 15,4 million for a Rapid response and preparedness instrument that would come into force in 2007. The objective is to improve early warning mechanisms regarding natural hazards such as earthquakes, floods and forest fires as well as to increase the efficiency and effectiveness of civil protection interventions. The expert committees concerned might look at whether EUR 15,4 million is an amount of money that would enable significant added value to be achieved.
64. One should mention under this heading that the European Solidarity Fund (EUSF) is intended to provide assistance in the event of a major natural disaster within the EU. Up to EUR 1 billion would be available annually, but this is not included within the MFF ceiling.
65. Press and communications activities intended to improve the flow of information between the European institutions and the people of Europe have planned appropriations in the PDB of EUR 69,1 million. This potential spending would include efforts to improve debate about Europe through the "Plan D" approach.
66. Finally, page 10 of document II of the Commission's PDB appears to indicate that EUR 87 million has been allocated within Heading 3b to institution-building in the policy area of enlargement. The related activity statement should contain further information about intended spending in this regard.
Heading 4 - The EU as a global partner
General Aspects
- The new heading 4 comprises, in addition to the heading 4 of previous years, the old heading 7 (pre-accession) as well as the old heading 6 (Emergency Aid reserve and the provisioning of the Guarantee Fund for external actions).
- The PDB reflects the new legislative framework consisting of three policy-driven instruments: Neighbourhood (ENPI); Pre-accession (IPA); Development and Economic Cooperation (DCECI); and the three specific instruments which complement them (Stability, Humanitarian Aid and Macro-financial assistance). CFSP is kept separate.
67. In terms of nomenclature, the Commission has sometimes opted to maintain separate certain chapters and/ or lines constituting a "sub-policy", presumably for reasons of transparency. For example, chapter 19 04 (European Initiative for democracy and human rights) is maintained as a separate entity, but with the individual lines referring in their titles to the main instrument to which they "belong". As an example, budget line 19 04 02 01 is now titled "Human Rights and democracy - Activities under the.......Neighbourhood Policy Instrument"
68. The Commission is generally proposing to keep separate the major geographical regions. But this is not normally the case for countries, and a few thematic policies. In some cases, visibility has disappeared. It is for example no longer possible to see from the PDB how much assistance is budgeted for Iraq or Afghanistan.
69. Overall, commitment appropriations are proposed at EUR 6,7 billion compared to EUR 8,4 billion in B2006 (-20,2%). The difference of EUR 1,7 can be accounted for by the appropriations for Bulgaria and Romania (heading 7 in 2006 budget) which are now budgeted under the internal headings (to much higher amounts) in line with a foreseen accession on 1 January 2007. Payments for the heading overall are budgeted at EUR 7, 4 billion, a decrease of 13, 8%. Having eliminated the effect of the transfer of Bulgaria and Romania, the heading as a whole is therefore practically +/- 0 on 2006. But, the picture is more complicated.
70. Funds for the Guarantee Fund (200m) are now included under heading 4 whereas they were under Heading 6 in the 2000 - 2006 financial perspective. They must be financed under the ceiling (200 m less space for other policies compared to 2006). The Emergency Aid reserve (234,5m) is included in the overall figure for Heading 4 but will be financed (if mobilised) outside the ceiling. There is therefore no effect on the space remaining for other policies. This also explains why there is an overall margin of EUR 110 million, although total commitments are actually 125 million higher than the ceiling. Funds for Northern Cyprus are no longer in the PDB and international fisheries agreements have been transferred to heading 2.
External relations
71. This area as a whole remains virtually unchanged at EUR 3,41 billion (-0, 71%). European Neighbourhood Policy and relations with Russia is budgeted at EUR 1,34 billion, +8% compared to 2006. Separate budget lines are maintained on a geographical basis for Mediterranean countries EUR 750m (- 0,7% on 2006), Eastern Europe at EUR 367m (+ 0,7 % on 2006) as well as for financial assistance to Palestine and the peace process at EUR 158 m (+ 34,8 %). The rapporteur asks the Commission to confirm whether this amount contains all amounts for Palestine, including the aid that was financed from the MEDA line in previous years.
72. Latin America sees a marginal increase in the PDB at EUR 326m compared to 318m in B2006. Relations with Asia, Central Asia and east of Jordan countries: appropriations fall from EUR 1 084 million in B2006 to 771 million in the PDB. This is accounted for by the ending of special support for the 2005 tsunami and, according to the Commission, "...aid to other beneficiaries in the region will be increasing". More detailed information is necessary.
73. As concerns the European Initiative for Democracy and Human Rights (EIDHR), appropriations are increased by some 8 million to a total of EUR 130, 7 million. This initiative maintains separate budget lines but the titles of these now reflect the Commission's proposal to integrate human rights into the four main instruments. The EP is requesting that a proposal for a separate legal base is presented, which would necessitate adjustments to the titles of these lines.
74. For Common Foreign and Security Policy (CFSP) the PDB allocates EUR 159 million, an increase of 55% (102 m in 2006). The average per year over 2007-2013 agreed in the MFF is EUR 250 million.
Development and relations with ACP states
75. The significant number of specific thematic regulations in this area has been integrated into the new legal framework via new instruments. This is reflected in the budget structure, which changes considerably.
76. Overall, this title increases by 14% to EUR 1, 23 billion in the PDB (1,08 billion in B2006). The main increase relates to cooperation with ACP countries which has risen from EUR 202 million to 326 million. It should be recalled that the EDF finances most ACP cooperation outside of the budget, but some parts are also financed within the budget. The specific increase relates to support for sugar producing countries which will receive EUR 165 million (compared to EUR 40 million in 2006).
77. Non-state actors see a slight decrease at EUR 206 million, down from 210m in 2006. The thematic "NGO-co-financing line" disappears and is replaced by two new lines to be implemented under their main instrument (Development and Neighbourhood instruments in this case).
78. Food security decreases by 4, 4% to EUR 198 million. There is a reorganisation in the Commission as to responsibilities between DG Development and DG ECHO as concerns food aid and food security.
79. Human and Social Development (new lines also linked to the geographical instruments) replace some previous lines relating mainly to the Millennium Development Goals. These decrease from EUR 132 million in 2006 to EUR 117 million in the PDB (-11%). The same new structure is proposed for Environment and sustainable management of natural resources, including energy, an area which increases from EUR 57 million to EUR 74 million (+31%).
Enlargement
80. This heading decreases from EUR 2, 2 billion in 2006 to a total of EUR 1, 1 billion in the PDB, which can be explained by the part of Bulgaria and Romania previously financed here. When this effect is removed, this heading in fact remains at largely the same level as in 2006.
81. Spending linked to negotiations with Turkey and Croatia is set to increase in coming budgets. Although it is no longer possible to see from the PDB budget lines how much assistance is actually budgeted for these, the Commission indicates in its working document that the increase for Turkey in 2006 did not yet take the intensified activities into account. The PDB 2007 presumably does, but the rapporteur would welcome further clarification. For Croatia, the Commission indicates that funding will remain essentially the same.
82. Also as concerns the Western Balkans, it is difficult see how much is budgeted for any specific country. It should be noted that funds for the EU reconstruction Agency will start to be phased out in 2007 as the EC delegations should now take over assistance from the IPA instrument. Additional information on the funding of this Agency is necessary.
Humanitarian Aid
83. This policy area has remained more or less constant over the past three years in terms of appropriations for ECHO, with humanitarian aid and disaster preparedness totalling around EUR 500 million. This has not changed in the PDB. What is new is that Food Aid has been transferred to ECHO and included at EUR 218 million (previously under DG Development). The Emergency aid reserve, in previous years under the old heading 6, is also now included here and endowed with EUR 234 million in the PDB.
Heading 5 - Administration
84. This heading concerns aspects related to the human resources and other administrative expenditure. There is a certain continuity in Heading 5 between the new MFF and the previous FP. The PDB presents for 2007 a budget of EUR 7 002 million, which leaves a margin of EUR 112,7 million once EUR 76 million of staff pension fund contributions have been taken into account.
85. The Commission's administrative budget for 2007 is estimated at EUR 4 360 million with pensions and the cost of European Schools included in the total. This represents an increase of 5.2% compared to B2006. Approximately 4% of the overall administrative budget is linked to recruitment for new posts.
86. The increase in appropriations is mainly due to the increase in staff recruited to deal with the increased work-load due to the enlargement. 840 new posts are directly linked to the enlargement (610 for EU-10 and 230 in view of the scheduled enlargement to Bulgaria and Romania (EU-2) on 1 January 2007). These numbers are complemented by 50 external staff (30 for EU-10 and 20 for EU-2) according to PDB document I (page 41). The request is in line with the multi-annual plan on enlargement needs presented by the Commission in its communication "Activities and human resources of the Commission in the enlarged European Union"[18] for the period 2003-2008 (+700 posts in 2006, +700 in 2005 and +780 in 2004). In addition to them 13 new posts devoted to the recruitment of the specialists needed in the legal and linguistic departments following the change in status of the Irish language are requested.
87. As regards the other needs in staff, the Commission, as last year, has made an effort to limit the financial implication by redeploying the posts between DGs (245 posts) and within the DGs (340 posts).
88. The reinforcement of the security in the buildings of the Commission in Brussels and in the delegations represents the lion's share of the remaining requested increase in Heading 5 (+10.6% according to PDB document I, page 44). The installation of security gates in all buildings at headquarters is intended for the first year of a four year programme and should generate significant savings in insurance and security personnel costs. In the delegations, reinforcement in security is needed according to the risk attached to the country where the delegation is based. This is especially high in the Balkans and, potentially, in Iraq where the Commission has the intention to open a delegation by the end of 2006. The cost foreseen in the PDB for this single delegation is roughly EUR 7 million including rent of office and body-guards for the staff.
89. In order to encourage the Commission's staff to use public transport, the Commission has decided to reimburse half of the price of public transport for staff who commute and renounce the use of the parking facilities. This will represent an increase of 622.2% relative to the minimal spending in this regard in previous budgets.
Heading 6 - Compensation
90. The PDB proposes to budget nearly the full amount available, that is EUR 444,6 million out of a total of EUR 445 million. For 2007, Heading 6 covers the Cash-Flow facility and the Schengen facility (for financing control actions at the new external borders of the Union), agreed during the accession negotiations with Bulgaria and Romania.
Horizontal issues
Agencies
91. PDB 2007 includes appropriations for 23 decentralised agencies[19] for a total amount of EUR 417,6 million which is an increase of nearly 18% as compared to the agencies' budget of 342,7 million in 2006. The vast bulk of expenditure on agencies falls under Heading 1 where around 50% of the total agencies' budget for 2007 is concentrated. 37% of the total amount is planned for agencies under Heading 3, whereas Heading 2, with 8%, and Heading 4, with 5%, only receive minor shares.
92. The rate of increase of 18% in the agencies' budget compared to 2006 is partly due to the creation of new agencies like the Chemicals Agency or the Gender Institute. However, the rates of increase in the budgets of the individual agencies are anything but homogeneous. . The rapporteur will fully evaluate the situation after the annual meeting with the agencies on 12 July.
Pilot projects and preparatory actions
93. The Commission usually presents with the PDB a first working document on pilot projects and preparatory actions. For 2007, however, this document will be ready a later than planed and is not at the rapporteur's disposal at the time of drafting this document. A review of the Commission's remarks and proposals will be made in due course.
94. The main provisions of the new MFF should be recalled:
"...Furthermore, the institutions agree to limit the total amount of appropriations for pilot schemes to EUR 40 million in any budget year. They also agree to limit to EUR 50 million the total amount of appropriations for new preparatory actions in any budget year, and to EUR 100 million the total amount of appropriations actually committed for preparatory actions. (annex 2, D)
95. Two issues arise. Firstly, the provisions of the current financial perspective clearly limits the number of years for which commitments can be entered for a pilot project in the budget to two years. This provision is not retained in the MFF, at least not explicitly. It could be argued that no such restriction in time will exist as of 1 January 2007. Similarly, the previous rule of a maximum of three years for preparatory actions is no longer mentioned. The rapporteur will seek clarification on this aspect.
96. Secondly, it should naturally be pointed out that the Parliament's margin for manoeuvre should increase. With respect to pilot projects, the annual limit will be EUR 40 m instead of EUR 36m currently. For new preparatory actions the annual limit will be EUR 50m instead of EUR 30m currently. For the global amount of preparatory actions committed the maximum increase possible will be EUR 25 million (with limit of EUR 100m instead of EUR 75m currently). Nevertheless, the rapporteur highlights that the margins in the new MFF will oblige the EP to review carefully its own approach to PPs/ APs.
97. In the Commission's general presentation of the PDB it is stated that appropriations for pilot projects amount to EUR 1 million in commitments and EUR 22,7 million in payments, and for preparatory actions EUR 3,3 million and EUR 47 million respectively. The rapporteur emphasises that the Commission's working document should contain a clear analysis of how the previous projects have either been integrated into the new legislation that will come on stream as of 2007 or if any of them are simply proposed to be discontinued completely. In any case, the minimal commitments suggested in the PDB leave a large margin for the Parliament to intervene.
on research, innovation and energy
"You see things: and you say "why?" But I dream things that never were;
and I say "why not?", George Bernard Shaw
Introduction
1. This working document analyses the financial resources that the European Union provides for research and innovation. It will also focus on energy as this subject matter per its nature is not only linked to other important policy areas such as external relations but is also strongly affected by technological development.
2. The present document will look at the challenges the European Union faces in these policy areas. In this light the implications for the 2007 budget procedure will be examined bearing in mind that it will be the first year of spending within the new 2007-2013 multiannual financial framework (MFF) and therefore only the beginning of a number of new programmes. The rapporteur wishes to highlight at the outset that resources available for research are not what they might have been. The original Commission proposal for the 7th Framework Programme for Research (FP7) foresaw overall Community financial participation at EUR 72 726 million for 2007-2013. The European Parliament firmly supported this position. The figure in the new MFF is now significantly lower: the maximum indicative amount is EUR 50 524 million.
Research and Innovation
Challenges
3. As the Commission states on its website "research is an investment in our future well-being. The fruits of efforts made today may not be visible for several years. But equally, failure to invest now will cost future generations dearly". The European Union has the ambition to become the world's most dynamic knowledge-based economy by 2010. The R&D target is to achieve R&D investment of 3% of GDP by this date. At present, the United States and Japan each spend proportionately more on R&D than the EU and its Member States.
4. In its resolution on the APS for 2007 of 18 May 2006 the European Parliament "urges the Member States and the Commission to pay special attention to those areas that form the basis of a healthy economy such as knowledge, skills, research and development......calls for all policies in Member States and at EU level to be geared to supporting research and innovation wherever possible....".[20]
5. Traditionally, the EU's innovation policy is linked to research. There will be a new programme (the Competitiveness and Innovation Programme - CIP) in the 2007 - 2013 MFF that tackles innovation in the light of the need to improve the EU's competitiveness and economic environment. The aim of EU activity in the field of research is to reinforce national research efforts by creating a frontier-free European research area, enabling scientists across the EU to join forces in pursuit of excellence.
Key budget-related issues
6. The original Commission proposal for the 7th Framework Programme for Research (FP7) foresaw an overall amount of Community financial participation of EUR 72 726 million for the period 2007-2013. This proposed budget was firmly supported by the European Parliament in its resolution on Policy Challenges and Budgetary Means of the enlarged Union 2007-2013 (Boege report)[21]. Following the adoption of the new MFF the final budget is now significantly lower: The maximum indicative overall amount for Community financial participation in FP7 (excluding Euratom) shall be EUR 50 524 million for the period of 7 years starting on 1 January 2007.
7. For 2007 the Commission is proposing a budget for a total of EUR 5 486 million in commitment appropriations for FP7.
7th Framework Programme: repartition between different policy areas
(in thousand EUR, at current prices)
Policy Area |
Budget 2006 |
Preliminary draft budget 2007 |
|
Enterprise (*) |
118 064 |
191 017 |
|
Energy and Transport |
224 028 |
248 424 |
|
Research |
3 475 735 |
3 549 874 |
|
Information Society and Media |
1 162 898 |
1 174 213 |
|
Fish |
14 900 |
1 200 |
|
Direct research |
310 600 |
321 472 |
|
Total (*) |
5 306 225 |
5 486 200 |
|
(*) To these amounts for Budget 2006 should be added EUR 15 million for the preparatory action for the enhancement of European security research, which is included in the 7th Research Framework Programme.
Source: European Commission
8. The main features of FP7 are reflected in 4 of the 7 Specific Programmes:[22]
§ Cooperation (EUR 3 468,6 million in PDB 2007): This is the most important Specific Programme in terms of budget. It aims at promoting research at the highest level of excellence. Support will be provided to trans-national cooperation in nine thematic areas: health, food-agriculture-biotechnology, information-communication technologies, nanosciences-nanotechnologies-materials-new production technologies, energy, environment (including climate change), transport, socio-economic sciences-humanities, security-space.
§ Ideas (EUR 260,8 million in PDB 2007): The objective of this Specific Programme is to reinforce excellence, dynamism and creativity in European research and improve the attractiveness of Europe for the best researchers from both European and third countries, as well as for industrial research investment, by providing a Europe-wide competitive funding mechanism for "frontier research" executed by individual teams.
§ People (EUR 430,2 million in PDB 2007): This Programme aims at strengthening the human potential in research and technology in Europe by supporting training and career development of researchers referred to as "Marie Curie Actions" with a better focus on the key aspects of skills and career development and strengthened links with national systems.
§ Capacities (EUR 407,8 million in PDB 2007): This Specific Programme aims at enhancing research and innovation capacities throughout Europe
- by optimising the use and development of research infrastructures;
- by strengthening innovative capacities of SMEs and their ability to benefit from research;
- by supporting the development of regional research-driven clusters;
- by supporting international cooperation.
9. An innovation of FP7 is the establishment of the European Research Council, which will support basic research at European level on the basis of scientific excellence, conferring a European added value through Europe-wide competition and promotion of scientific excellence at the highest level. It will support research projects which will be selected on their scientific merit and on topics that are chosen by the researchers themselves, through a bottom-up approach. In this context, the rapporteur wishes to recall the text of the European Parliament's APS resolution as regards the European Institute of Technology: "... a new European Institute of Technology may undermine or overlap on existing structures and may not be the most effective use of funds...".
Rules for participation in the research programmes - room for improvement
10. There has been much discussion on the need for more funding for research. However, there have also been proposals as to how to improve the overall cost-benefit balance. The Court of Auditors has looked into the implementation of current research programmes and has made recommendations on how to increase the value for money. The main problems concern the following issues:
§ long duration of funding procedures under the current Framework programme (FP6)
§ up to 263 calendar days between receipt of documents by Commission and the signing of the contract
§ long pre-financing by participants is often necessary (difficult for SMEs)
§ a simplification of the whole procedure is badly needed (e.g. through the creation of an integrated database)
§ need to reduce administrative cost.
11. These issues are currently being tackled by the EP: the first reading on the Regulations laying down the rules for the participation in actions under FP7 will be concluded before the summer break. The Committee on Budgets intends to propose amendments aiming at improving the current system.[23]
12. One should not forget that Member States also finance research activities and EU funding is one (important) contribution to the overall aim of fostering research. Budget-related aspects are just one part of research policy. Other elements also play a significant role such as cultural background, the economic environment (market forces), the protection of intellectual property rights (conditions for registering patents) etc. All of these issues affect the willingness of researchers and private companies to invest time and money. Therefore, the European research programmes can only be one part of the solution.
Energy
Challenges
13. Energy is one of the subjects included under the Specific Research Programmes. The objective is quite ambitious: "Transforming the current fossil-fuel based energy system into a more sustainable one based on a diverse portfolio of energy sources and carriers combined with enhanced energy efficiency, to address the pressing challenges of security of supply and climate change, whilst increasing the competitiveness of Europe´s energy industry."[24] The rapporteur highlights the major potential contribution of fusion technology to efforts in delivering safe and secure energy supplies.
14. Indeed, there is a wide range of challenges ahead for EU energy policy. Needless to stress that the problem of high dependence on imports from third countries has been highlighted by recent events (currently, imports account for 50% of total EU demand - this figure is projected to rise to 70% by 2030 if current trends persist). Reserves are concentrated in a few countries. Today, roughly half of the EU’s gas consumption comes from only three countries (Russia, Norway, and Algeria). On current trends, gas imports would increase to 80 % over the next 25 years. Security of supply has thus become one of the major concerns of the EU´s energy policy.
15. Given the crucial role of the energy sector for the competitiveness and the economic growth of the EU, all activities in this field contribute directly to attaining the objectives of the Lisbon strategy, such as the completion of the internal market for gas and electricity, the promotion of eco-innovation and of European technology initiatives in environment friendly technologies.
16. There is also an urgent need for investment. In Europe alone, to meet expected energy demand and to replace ageing infrastructure, investments of around one trillion euros will be needed over the next 20 years.
Key budget-related issues
17. In the PDB 2007 the Commission proposes EUR 120,42 million in commitment appropriations for research related to energy.
18. There are several energy-related fields of research that will be covered by FP7:
§ hydrogen and fuel cells: The aim is a strategic, integrated programme for transport, stationary and portable applications aimed at building a competitive EU fuel cell and hydrogen supply and equipment industry.
§ renewable electricity (photovoltaics, wind, biomass, geothermal energy, ocean and small hydropower): research should aim at increasing overall conversion efficiency, driving down the cost of electricity significantly, enhancing system reliability and reducing the environmental impact further.
§ renewable fuel production ("biofuels"): Improve technologies for the sustainable production and supply chains of solid, liquid and gaseous fuels from biomass in particular biofuels for transport. Currently, there is a lot of discussion on the still unused potential of biomass (i.e. waste and residues from agriculture including vegetal and animal substances, forestry and related industries, as well as industrial and municipal waste). Electricity or biogas can be produced from biomass (e.g. from the wood waste gained during the processing of wood).
§ renewable energy for heating and cooling (a growing part of EU´s energy consumption is used for heating and cooling)
§ CO2 capture and storage technologies for zero emission power generation: under this ambitious title the Commission intends to finance projects dealing with the reduction of the environmental impacts of fossil fuels which will inevitably continue to represent a significant share of the energy mix for decades to come.
§ clean coal technologies: coal fuelled power plants remain the workhorse of electricity generation worldwide, but have considerable potential for further efficiency gains and emissions reductions, particularly concerning CO2.
§ smart energy networks: R&D effort is required to increase the efficiency, flexibility, safety and reliability of the European electricity ad gas systems and networks (see recent power cuts in different Member States of the EU). The proper implementation of EU legislation concerning the internal market in energy by the Member States as well as the completion of several TEN-energy projects will foster this development .
§ energy efficiency and savings: there is a vast potential in this area which is - apart from the diversification of energy sources - probably one of the most promising strategies.
§ knowledge for energy policy making: including the building of databases and scenarios for an enlarged EU and the assessment of the impact of energy policies on security of supply, environment, society and competitiveness.
§ fusion technology: the EU is about to join forces with other major global economies on the ITER nuclear fusion project. With adequate research funding upfront, there is huge potential for fusion technology to provide energy at a practical level for society with limited associated waste problems. The funding issue is all the more relevant given that global R&D in energy technology is estimated at only 0.3% of the world's annual EUR 4 trillion energy market.
19. Apart from FP7 there are other non-research related energy programmes known under the title "Intelligent Energy-Europe". They aim at promoting renewable energy and energy efficiency, encouraging the use of clean urban transport and alternative fuels. This programme is now included in the Competitiveness and Innovation Programme (CIP): 20% of the overall budget of the CIP[25] is earmarked for energy. In the PDB 2007 the Commission proposes EUR 58,9 million in commitment appropriations for the Intelligent Energy Programme, which is approximately the same amount as in the 2006 Budget.
20. As for nuclear energy the priorities for 2007 remain enlargement (decommissioning funds which are partially managed by the EBRD), safety of nuclear plants and the safe and efficient management of nuclear waste as well as the protection of the general public (nuclear safety and radiation protection). Other fields of action include the cooperation with the International Atomic Energy Agency (IAEA).
21. There is a considerable increase in the commitment appropriations foreseen in the PDB 2007 for nuclear safety including decommissioning: EUR 244 million (which represents an increase of 70% in commitment appropriations when compared to 2006). This is mainly due to the fact that the EU gives considerable financial support to the decommissioning of the nuclear power stations in Ignalina (Lithuania), Bohunice VI (Slovakia) and Kozloduy (Bulgaria).
Still a long way to go
22. Europe has not yet developed fully competitive internal energy markets. Only when such markets exist will EU citizens and businesses enjoy all the benefits of security of supply and lower prices. To achieve this aim, interconnections should be developed, effective legislative and regulatory frameworks must be in place and be fully applied in practice, and Community competition rules need to be rigorously enforced. Furthermore, the consolidation of the energy sector should be market driven if Europe is to respond successfully to the many challenges it faces and to invest properly for the future.
23. One should also not forget that there is a huge potential of energy efficiency that is still widely unused. More awareness-raising and information of the energy consumer how to spend less energy while achieving the same result are badly needed. Some energy experts argue that such measures still do not receive enough attention (and funding). There is also a recent Directive on "Energy Services" that tries to establish a market for services aiming at reducing the consumers´ energy bill.
24. An efficient EU energy policy does not only consist of budget-related action. External relations play a crucial role - the Commission intends to broaden the so-called energy dialogue with the producer countries such as Russia and with other important energy users such as China and India who have become a major competitor for energy resources. Global demand for energy is increasing. World energy demand - and CO2 emissions – is expected to rise by some 60% by 2030. There is certainly a need for the EU to speak with one voice as the world’s second largest energy market with over 450 million consumers and to negotiate the best possible conditions for trade and investments in the energy field.
25. Tax policy, which is still widely a competence of the Member States, can provide an incentive to use new and alternative fuels and renewable energy.
26. Last but not least one should not forget that the EU has already adopted a wide range of EU legislation in the field of energy (e.g. on the promotion of biofuels, renewable energy, completion of the internal market in gas and electricity, energy efficiency etc.) In this sense an efficient energy policy is also a question of proper implementation of EU legislation by the Member States, as stressed by the European Parliament in its resolution on the APS for 2007.
Questions for the hearing
1. How well does planned EU spending in PDB 2007 on research and innovation match up to the ambitious objectives of the Lisbon Strategy?
2. Does the EU economy have a strong enough scientific skills-base for an even higher research budget?
3. Does the 7th Research Framework Programme (FP7) allow for sufficient flexibility in order to address new and adapt to future challenges facing the EU?
4. More specifically, how far does FP7 respond to the increasingly important challenges facing the EU as regards energy policy, where technological progress is of vital interest for the future of the EU and its economy? What steps can be taken in the 2007 budgetary procedure in order to reflect this new priority?
5. Where do you see room for improvement in the current rules for participation in EU research programmes?
6. Having regard to experience gained during the implementation of the previous FP6, how can the limited funds of FP7 be spent more efficiently? What role is there for cost-benefit analysis in this regard?
on freedom, security and justice
"The most certain test by which we judge whether a country is really free is the amount of security enjoyed by its minorities", Lord Acton
Introduction
1. This working document analyses the financial resources that the European Union is due to provide in 2007 under Title 18 entitled "Freedom, Security and Justice" in its general budget.[26] This policy area was established under the Amsterdam Treaty and broadly refers to policies which at Member State level could be described as "Internal" or "Home affairs". Comparison with spending in previous budget years is extremely difficult given nomenclature that has changed frequently over recent years. Moreover, six budget lines/ activities under title 18 have changed name[27] between the budget 2006 and the 2007 preliminary draft budget (PDB).
2. Heading 3 in the Multi-annual Financial Framework (MFF) 2007 - 2013 is now called "Citizenship, Freedom, Security and Justice", but internal/ home affairs issues are, for the first time, covered by a newly established sub-heading "Freedom, Security and Justice": Heading 3a. "Citizenship" is covered under heading 3b.[28] The responsible Commissioner, Vice-President Frattini, has the portfolio "Justice, Freedom and Security". This is also the name of the relevant Commission Directorate-General, which was named "Justice and Home affairs" until August 2004[29].
3. This working document will therefore concentrate on Title 18. It will not analyse amounts dedicated to issues such as the "security research" in the 7th Framework Research Programme[30] (mentioned in Subheading 1a). It also does not analyse expenditure falling under subheading 3b "Citizenship" which covers the communication of EU policies to citizens of the European Union.
Challenges
Overall resources within Heading 3a
4. As the European Parliament in its resolution on the Commission's Annual Policy Strategy report (APS) stated[31]: "European citizens need security in their everyday lives" and "in the face of modern, globalized crime, concerted EU action is a necessary component of policies to ensure a safe society founded on the rule of law"[32]. In terms of the overall resources to tackles policy challenges in this area, in its Preliminary Draft Budget (PDB), the Commission states an increase of 5,24 % between the figures for 2007 (EUR 619 million) and 2006 (EUR 588,2 million)[33]. Looking at the corresponding table in the Budget 2006[34], EUR 590,4 million had been allocated by the budgetary authority to Title 18, which would mean an increase of only 4,84 per cent. It is clear that the EUR 619 million appropriation foreseen in the PDB contains administrative as well as operational expenditure. As regards operational expenditure in Title 18, according to the Commission's PDB, this totals EUR 571,3 million. This implies EUR 47,7 million for administrative expenditure. Unfortunately, this does not correspond to line 18 01 entitled "administrative expenditure of area of freedom, security and justice policy area" for which EUR 51,47 million is requested.
5. The Commission presents the following split between the different actions (general programmes, other actions and programmes, decentralised agencies) in PDB 2007:
Table 1
|
PDB 2007 |
|
|
Framework Programme /Other Programme /Agencies |
EUR |
% |
|
Fundamental rights and justice |
71 510 000 |
12,5% |
|
Solidarity and management of migration flows |
291 300 000 |
51,0% |
|
Security and safeguarding liberties |
57 490 000 |
10,1% |
|
Other actions and programmes |
78 400 000 |
13,7% |
|
Decentralised agencies |
72 639 000 |
12,7% |
|
Total |
571 339 000 |
100,0% |
|
Source: European Commission
But is not clear if these two figures can be compared at all as Budget 2007 will see the launch of three new framework programmes: "Fundamental Rights and Justice", "Solidarity and Management of Migration flows" and "Security and Safeguarding Liberties"[35].
The integration of migrants and border management
6. Management of migratory flows is a global political issue. Publications such as the World Migration Report[36] produced every two years by the International Organisation for Migration highlight monitor the major developments in migration trends. The most recent 2005 report highlights that the estimated 175 million international migrants represent around 2.9 percent of the global population. In the current European debate, the situation regarding migrants is a particularly important topic in Spain, where attention has focused on movements of people from the continent of Africa.
7. The APS resolution (paragraph 22): "stresses that the objective of the integration of migrants and border management is of importance in the years to come; intends to provide sufficient means in 2007 to ensure that the extension of the Schengen area is flanked by the principle of Community solidarity in the management of the Union's external borders".
8. Concerning the main element of spending, "Solidarity and Management of Migration flows", EUR 60 million have been foreseen in PDB2007 for Budget line 18 03 03[37], although the new specific programme "European Refugee Fund" will take effect only as of Budget 2008. The new, co-decided, programme has not even reached First Reading in Parliament yet. The "old" legal base, Decision 2004/904/EC is due to be repealed as of 1 January 2008 and replaced by the new programme from that date on.
9. Given the importance attached to the integration of migrants and the effective management of borders in the APS resolution and in light of the political attention that migration issues frequently attract, one might examine in more detail the degree to which the budgetary situation regarding solidarity and management of migration flows and the European Refugee Fund is satisfactory.
Other areas of spending in Heading 3a and related issues
10. It is confusing to note that under the general programme "Fundamental rights and justice" a specific programme "Fundamental rights and citizenship"[38] is proposed by the Commission which is not financed under subheading 3b - Citizenship, but under subheading 3a.
11. Looking more closely at "Other actions and programmes", EUR 68 million out of EUR 78,4 million is due to go to lines 18 02 04 and 05, called Schengen information system (SIS II)[39] and Visa information system (VIS)[40]. SIS II consists basically of a large computer based in Strasbourg giving Member States the possibility of detecting wanted persons, following the abolition of internal border controls. VIS also is a database facilitating the exchange of data concerning the common visa policy and consular cooperation between Member States on applications in order to prevent threats to internal security of any of the Member States, to prevent the bypassing of the criteria for application and to facilitate the fight against fraud and to assist in the identification and return of illegal immigrants. Whereas the objectives for these two actions can be fully subscribed to, important budgetary questions remain. For example, in the financial statement of the proposal, EUR 14,4 million and EUR 24 million have been foreseen for SIS II and VIS. However, in the PDB 2007, budget lines 18 02 04 and 18 02 05 foresee EUR 20 million and EUR 48, million respectively. It would be interesting to have further information as to what explains these differences.
12. As regards Pilot Projects and Preparatory Actions[41], according to the Commission, the appropriations for pilot schemes in PDB 2007 amount to EUR 1 million in commitments and EUR 22,7 million in payments. For preparatory actions the figures are EUR 3,3 million and EUR 47 million respectively (Document I, p. 8). This could reflect the integration of several of the previous pilot schemes and preparatory actions into the new generation of programmes (e.g. terrorism). The Commission considers that this leaves ample scope for new actions.
a. The only pilot project under heading 3a is "Fight against Terrorism". The figures are as follows:
Table 2
Line |
DG responsible |
2005 |
2006 |
2007 |
Name |
Budget 2005 |
Budget 2006 |
Budget 2007 |
||||
CA |
PA |
CA |
PA |
CA |
PA |
|||||||
HEADING 3a |
||||||||||||
18 05 06 |
JLS |
PP1 |
PP2 |
|
Fight against terrorism |
7,0 |
4,0 |
9,0 |
7,0 |
p.m. |
6,0 |
|
Sub-total heading 3a |
7,0 |
|
9,0 |
|
|
|
||||||
Source: European Commission
13. It's main objective is to enhance the EU’s effectiveness in preventing terrorist acts, by improving co-operation and co-ordination of counter-terrorism activities between Member States’ intelligence, security and law enforcement services, Europol and the Task Force of EU Police Chiefs, in particular as regards the implementation of the relevant elements in the EU Action Plan to combat terrorism and the Hague multi-annual programme for strengthening freedom, security and justice in the European Union. A continuation of this preparatory action is apparently not foreseen in 2007, as it should be integrated into the general programme "Security and safeguarding liberties", co-decided by Parliament.[42]
14. There are seven preparatory actions in the area of freedom, security and justice:
Table 3
Line |
DG responsible |
2005 |
2006 |
2007 |
Name |
Budget 2005 |
Budget 2006 |
Budget 2007 |
||||
CA |
PA |
CA |
PA |
CA |
PA |
|||||||
HEADING 3a |
||||||||||||
18 03 05 |
JLS |
AP3 |
- |
- |
European Migration Monitoring Centre |
3,0 |
3,8 |
p.m. |
1,8 |
p,m. |
2,0 |
|
18 03 06 |
JLS |
AP2 |
AP3 |
|
Integration of nationals of non-members countries |
5,0 |
6,0 |
5,0 |
5,75 |
p.m. |
6,45 |
|
18 03 08 |
JLS |
AP1 |
AP2 |
|
Financial instrument for return management in the area of migration |
15,0 |
8,0 |
15,0 |
10,0 |
p.m. |
12,5 |
|
18 04 03 |
JLS |
AP2 |
AP3 |
|
Research and evaluation programme on respect for fundamental rights |
1,0 |
1,4 |
0,5 |
1,0 |
p.m. |
0,8 |
|
18 04 04 |
JLS |
AP2 |
AP3 |
|
Support of Civil society in the new Member States |
2,0 |
2,0 |
1,0 |
1,0 |
p.m. |
2,8 |
|
18 05 01 03 |
JLS |
PP2 |
AP1 |
|
Exchange programme for judicial authorities |
(3,0) |
2,5 |
3,0 |
2,8 |
p.m. |
1,0 |
|
18 05 04 |
JLS |
PP2 |
AP1 |
|
Preparatory action in favor of the victims of terrorist acts |
(2,0) |
1,0 |
2,0 |
1,2 |
p.m. |
1,2 |
|
Sub-total heading 3a |
26,00 |
|
26,5 |
|
- |
|
||||||
Source: European Commission
It is unclear to what extent these preparatory actions are to be continued or subsumed within broader programmes. It would be useful to receive more information in this regard.
Questions for the Hearing:
1. Heading 3a is a relatively new area of spending at EU level. At a general level, and after a number of years of experience in this policy area, is the money being well spent? what is the added-value at EU-level of the money spent in this area?
2. In light of the importance attached to the effective integration of migrants and management of borders in the European Parliament's resolution on the Commission's Annual Policy strategy, what are the most effective measures to be taken at European level? To what extent will the funds allocated to actions under "solidarity and the management of migration flows" provide solutions?
3. What are the intended next steps as regards the preparatory actions listed in the area of freedom, security and justice?
4. As the financial sheet of the proposals on SIS II and VIS differ significantly from the amounts indicated in the PDB: what will be the real costs of the two actions on SIS II and VIS?
5. Are the proposed actions in the 7th Framework programme concerning security research clearly linked to justice, freedom and security matters (amongst competitiveness and growth), is there any intention by DG JSL to monitor the outcome of this research ?
on the draft budget for 2007 and results of the concilaition of 14 July 2006
"Great gifts wax poor when givers turn unkind", William Shakespeare
Introduction
1. This working document is in three parts. First, it provides an overview analysis of the main elements of the Council's draft budget (DB) for 2007. Second, it sets out the main changes in the DB relative to the preliminary draft budget (PDB) for 2007 prepared by the European Commission. Third, it reports on the conciliation meeting held between the Council and European Parliament in Brussels on 14 July 2006.
I - Main elements of the Council's draft budget
2. The overall figures in the Council's DB are set out below, in table 1, according to the heading structure of the new multi-annual financial framework (MFF).
Table 1: Summary of DB 2007
Heading |
Council |
Difference from 2007 PDB |
Difference from 2006 budget |
Margin below existing FF |
||||
Commitments |
Payments |
Commitments |
Payments |
Commitments |
Payments |
|
||
1. Sustainable growth |
|
|
|
|
|
|
|
|
1a. Competitiveness for growth and employment |
8 782 328 511 |
6 767 676 511 |
-13 775 000 |
-175 848 000 |
+11.31 |
-8.91 |
135 671 489 |
|
1b. Cohesion for growth and employment |
45 486 558 504 |
37 365 265 808 |
0 |
-425 000 000 |
+14.81 |
+17.75 |
441 496 |
|
Total |
54 268 887 015 |
44 132 942 319 |
-13 775 000 |
-600 848 000 |
+14.23 |
+12.69 |
136 112 985 |
|
2. Preservation and management of natural resources |
56 471 146 036 |
54 895 811 736 |
-746 430 000 |
-787 570 000 |
-0.14 |
-0.98 |
1 879 853 964 |
|
of which: market related expenditure and direct aids1 |
42 954 007 000 |
42 677 987 756 |
-730 000 000 |
-730 000 000 |
-0.84 |
-1.48 |
1 798 993 000 |
|
3. Citizenship, freedom, security and justice |
|
|
|
|
|
|
|
|
3a. Freedom, security and justice |
561 695 000 |
400 145 000 |
-9 644 000 |
-26 844 000 |
+2.24 |
-24.98 |
75 305 000 |
|
3b. Citizenship |
586 645 000 |
648 042 652 |
-16 410 000 |
-31 590 000 |
-4.06 |
+3.79 |
49 355 000 |
|
Total |
1 148 340 000 |
1 048 187 652 |
-26 054 000 |
-58 434 000 |
-1.08 |
-9.46 |
124 660 000 |
|
4. The EU as a global partner |
6 358 339 000 |
7261 521 578 |
-109 661 000 |
-185 948 000 |
-22.19 |
-13.66 |
219 661 0002 |
|
Emergency Aid Reserve |
234 527 000 |
0 |
0 |
0 |
-2.41 |
-100.00 |
|
|
Total |
6 592 866 000 |
7 261 521 578 |
-109 661 000 |
-185 948 000 |
-21.52 |
-15.95 |
|
|
5. Administration |
6 829 809 929 |
6 829 709 929 |
-124 436 044 |
-124 436 044 |
+3.43 |
+3.43 |
285 190 071 |
|
6. Compensations |
444 646 152 |
444 646 152 |
0 |
0 |
-58.58 |
-58.58 |
353 848 |
|
GENERAL TOTAL |
125 755 695 132 |
114 612 819 366 |
-1 020 356 044 |
-1 757 236 044 |
+3.68 |
+2.26 |
2 645 831 8682 |
|
Payment appropriations, as a % of GNI |
|
0.98 |
|
|
|
|
|
|
1 After transfer to Rural Development following modulation and from cotton to the restructuring in the cotton regions. 2 The margin does not take into account the appropriations related to Emergency Aid Reserve (EUR 234.5 million). |
||||||||
Source: Council Draft Budget explanatory memorandum
3. The rapporteur highlights that the "difference from 2006 budget %" columns in table 1 are not based on a like-for-like comparison since the DB 2007 is for EU 27 (including Romania and Bulgaria), whereas the 2006 budget is for the current EU 25. This reduces the transparency as regards proposed spending in the 2007 budget. The rapporteur requests that the Commission should present data on the budgetary costs and needs of Bulgaria and Romania separately in order to facilitate fair and accurate comparisons with earlier budgets.
4. In the DB, the Council has reduced the total commitment appropriations to € 125 756 million[43]. This is a cut of € 1 020 million from € 126 776 million in the updated PDB 2007. As usual in its 1st reading the Council has focused in particular on cutting the payments budget as compared to the PDB. Whereas the revised PDB had total payments at € 116 370 million, in the DB they stand at € 114 613 million. Total payments thus fall by 1,5 % to a level of 0.98% of EU GNI. Given that Annex I of the 17 May 2006 inter-institutional agreement (IIA) sets a ceiling of 1.06 % of EU GNI, there is significant headroom within the payments budget relative to the DB figures. The rapporteur does not consider that the level of payments in the DB will be sufficient to meet the policy challenges that the EU faces.
5. Table 2 compares the margins remaining under the MFF ceilings in light of the DB relative to the margins that were available under the revised PDB. The ceilings are taken from table 2 of the annex to the Commission communication (2006) 327 of 22.6.2006, which updates the MFF figures in line with point 16 of the IIA of 17 May 2006.
Table 2: Margins under the new MFF ceilings for commitments (€ million)
Heading |
MFF ceiling |
PDB 2007 |
PDB margin |
DB 2007 |
DB margin |
|
Heading 1a |
8 918 |
8 796 |
122 |
8 782 |
136 |
|
Heading 1b |
45 487 |
45 487 |
441 |
45 487 |
441 |
|
Heading 2 |
58 351 |
57 218 |
1 133 |
56 471 |
1 880 |
|
Heading 3a |
637 |
571 |
66 |
562 |
75 |
|
Heading 3b |
636 |
603 |
33 |
587 |
49 |
|
Heading 4* |
6 578 |
6 468 |
110 |
6 358 |
220 |
|
Heading 5** |
7 115 |
6 954 |
161 |
6 830 |
285 |
|
Heading 6 |
445 |
445 |
0 |
445 |
0 |
|
Total |
128 167 |
126 776 |
1 625 |
125 756 |
2 646 |
|
* The figures for heading 4 exclude the emergency aid reserve (€ 234,5 million)
** The ceiling for H5 is adjusted to include expenditure on pensions. The PDB figure for heading 5 has changed relative to Working Document 8 as a result of the revised estimates for "other institutions" .
6. The rapporteur recalls that his Working Document 8 provided an extensive analysis of PDB 2007 and emphasised the need for EU spending to be based on policy priorities given the limited resources available under the new MFF. In order to ensure value for money in the EU budget, the rapporteur underlines the contribution that cost-benefit analyses can make to focusing resources on priority areas. Setting policy priorities and improving value for money through cost-benefit analysis can also contribute to the preparing the 2008-2009 review of the MFF. This overall approach was set out in Parliament's resolution on the Commission's Annual Policy Strategy (APS) and further endorsed via the mandate voted in the Committee on Budgets on 11 July for the 14 July conciliation.
7. The rapporteur continues to consult with other committees in the process of preparing the European Parliament's 1st reading on the 2007 budget. At a general level, the rapporteur recalls the priorities set out in paragraph 6 of the APS resolution and re-stated in paragraph 5 of the mandate report. These priorities will be reflected in the Parliament's approach to the 2007 budget procedure. More specifically, and in light of the margins set out in table 2, the rapporteur considers that the amounts allocated to heading 1a and heading 4 appear particularly insufficient to meet the policy challenges facing the EU in these areas. The rapporteur also recalls the significant headroom available in the payments budget in this regard.
II - Main changes in the Draft Budget: specific aspects and by MFF heading
8. Before outlining the main changes in the DB by MFF heading, there are three specific aspects of the DB that the rapporteur wishes to highlight. These are: (i) horizontal cuts linked to the quality of Activity Statements; (ii) pilot projects and preparatory actions, and; (iii) administrative resources. These issues were discussed at the conciliation (see part III).
Horizontal cuts linked to activity statements
9. The Commission produces activity statements linked to the PDB, which set out the rationale for spending and key objectives in each policy area. The activity statements are prepared by the Commission Directorate-General responsible for each policy area. On the basis of detailed analyses by member states of these activity statements, the Council has deducted between 2 and 3 % of appropriations for particular policy areas in the DB. This approach appears to have elements in common with the cost-benefit approach advocated by the rapporteur. There is, however, a substantive difference between activity statements prepared by Commission Directorates-General and external assessments conducted by the European Parliament, or by external consultants on its behalf, that examine the overall qualitative value for money delivered by specific policies. The rapporteur wishes to see an improvement in value for money in the EU budget, but he would not endorse an approach whereby policies that do not constitute political priorities and/ or under-performing programmes receive additional funds solely because the relevant activity statements are well-drafted. In a spirit of seeking better value for money in the EU budget, the rapporteur would welcome a more in-depth discussion with the Commission and Council on how the analysis of the activity statements was conducted and how this fits with political priority-setting within the EU budget. The rapporteur seeks a co-ordinated approach across the EU Institutions on these issues.
Pilot projects and preparatory actions
10. The DB includes two budget lines for pilot projects:
· Strengthening education, research and innovation, the "knowledge triangle"
(Budget line: 02 02 09, commitments € 5 million, payments € 2 million)
· Energy security - promotion of EU self-sufficiency in renewable energy sources
(Budget line: 06 04 07, commitments € 5 million, payments € 2 million)
11. The rapporteur notes that these pilot projects cover priority areas for the European Parliament, but he raises two major concerns. On substance, he is concerned that these pilot projects do not constitute new areas of EU policy, but would seem to cover issues already within existing programmes. On process, notwithstanding the fact that the new IIA for foresees an early evaluation of new pilot projects and preparatory actions, he reserves his position on pilot projects and preparatory actions. He intends to come forward with his position in mid-September, taking into account proposals from other EP committees. As per paragraph 23 of the mandate report, he considers that a rationalisation and concentration of proposals should be an objective for the 2007 budget.
Administrative resources
12. In parallel with the DB, the Council adopted a unilateral declaration on administrative resources. This focused on posts in the Commission, to the effect that half of the posts which would become vacant through retirements in 2007 - some 200 posts - should be deleted in the 2008 budget. The declaration also sought the deletion of a further 500 posts between 2008 and 2010 linked to the concentration of programmes under the new MFF. The rapporteur cannot endorse such a position at this stage. He intends to make proposals in the EP first reading based on the report on the real medium-term staff needs that the Commission was asked to prepare by 1 September in the mandate report for the first conciliation. He emphasises the need for the redeployment of staff in the Commission to priority areas and he also considers staffing levels in the agencies to be a relevant issue in this context.
Changes in the draft budget by MFF heading
13. The remainder of this section of the working document presents the main changes in the PDB by MFF heading. The summary figures per heading, including changes to overall figures and margins, are presented in tables 1 and 2 above.
Heading 1a - competitiveness for growth and employment
14. The DB reduces the payments on budget line 09 04 03 02 by € 48 million on the completion of the 6th Framework Programme for Research in the field of Information society and media. The payments for Security and Space Research (budget line 02 04 01) are reduced by € 50 million. The payment appropriations for the TEN projects of common interest are reduced by € 30 million (this reduction concerns the completion of existing trans-European transport network, TEN-energy are not concerned). The Council placed € 15 million in reserve pending the adoption of a legal basis for the International Fund for Ireland.
15. As noted above, the DB includes two pilot projects on "knowledge triangle" (budget line 02 02 09) and on "energy security - promotion of EU self-efficiency in renewable energy sources, in particular biofuels" (budget line 06 04 07). In parallel, the DB reduces payments for the Intelligent energy-Europe programme (2003-2006) by € 10 million. This is somewhat surprising in that this programme deals with energy security by promoting the use of renewable energy including biofuels (see budget line 06 04 01). This suggests that these pilot projects may not cover new activities for which no current budget line exists.
Heading 1b - cohesion for growth and employment
16. The DB does not change the commitment appropriations in the PDB. Payment appropriations have been reduced by EUR 425 million: especially the budget lines relating to the completion of the 2000-2006 programmes (- € 355 million, of which € 220 million were cut in payments for the completion of the European Social Fund - objective 3 - budget line 04 02 06). Payments for the programmes prior to 2000 were reduced by € 70 million. The justification given by the Council is "the current trend of completion of these programmes". This should be looked at carefully. No reductions have been introduced for the Cohesion Fund.
Heading 2 - preservation and management of natural resources
17. The two largest cuts are for refunds for milk and milk products (superlevy - 05 02 12 01) of € 150 million in commitments and in payments, and for accounting clearance of € 205 million in commitments and payments. Commitments and payments to a value of € 10 million relating to international fisheries agreements have been placed in reserve bearing in mind uncertainties regarding the conclusion of new commitments. The rapporteur recalls that a report on the beneficiaries of these agreements has been requested and that any such expenditure is non-compulsory until the relevant agreements have been signed. Further, these figures are provisional pending the Commission's letter of amendment in October.
Heading 3a - Freedom, security and justice
18. The DB increases commitments for the External Borders Fund (18 02 06) by € 7.7 million, on the basis of its political importance, but reduces the increase in commitments for the Visa information system (18 02 05) by € 7 million given absorption limitations. Decentralised agencies in this heading have had overall cuts in commitments of € 9.18 million linked to examination of activity statements and "the specific situation of the Frontex Agency" (18 02 03 01 and 18 02 03 02), according to the DB.
Heading 3b - Citizenship
19. The also includes a reduction in appropriations of € 9.43 million in total for the decentralised agencies under this heading further to examination of activity statements and "the specific situation of the Food Safety Authority" (17 04 08 01, 17 04 08 02).
Heading 4 - The EU as a global partner
20. The DB includes increases in commitment appropriations for cross-border co-operation (19 08 02 01) of € 3 million and of € 17 million for co-operation with developing countries East of Jordan (19 10 03). This latter figure is essentially an increase in appropriations for activities in Iraq. There are also reductions for macro-financial assistance (01 03 02) of € 22.39 million in commitments and €23.12 million in payments taking into account the past implementation rate. Commitments for Transition and institutions building in current (22 02 01) and potential (22 02 02) candidate countries are cut by € 30 million in total given absorption capacities.
21. More generally, and in order to achieve "sufficient margin for unforeseen events", a 2% reduction is applied to appropriations for some geographical programmes and for the sugar protocol. Further modest reductions are achieved through cuts linked to the examination of activity statements.
22. The rapporteur notes the nomenclature changes introduced by the Council and the fact that the Council did not modify planned spending in the PDB on CFSP, but recalls that a cost-benefit study is due to be produced by the Parliament on spending in this area.
Heading 5 - administrative expenditure
23. Further to the above comments on administrative expenditure, for the Commission the DB has the standard flat rate abatement on salaries at 3.6% and the rate for productivity gains and the impact of the interinstitutional cooperation at 1.7%, as for the Council.
III - The 14 July conciliation
24. The conciliation covered: a presentation of the Council's DB and an exchange of views on administrative expenditure; the traditional "ad hoc" issues of agriculture, fisheries and CFSP; pilot projects and preparatory actions, and; the Financial Regulation, as an other business item. There was no substantive progress on any figures and no joint statements were agreed. Following the conciliation, the Council adopted the Draft Budget as prepared by Coreper. The rapporteur issued a press statement on value for money in the annual budget procedure, in line with the mandate report voted in COBU.
Presentation of the Draft Budget by the Council and administrative expenditure
25. Finnish Minister Wideroos (Chair of the ECOFIN Budget Council) presented the DB and sought the support of the EP to four draft council declarations, and in particular to the draft declaration on productivity gains for 2007 - 2013. As noted in paragraph 12, this declaration advocated cutting 200 posts in 2008 plus a further 500 posts between 2008 and 2010 in the European Commission. The EP delegation did not support the declarations by the Council.
26. On behalf of the committee on budgets, the rapporteur sought the support of the Council to a draft declaration on improving value for money in the EU annual budget procedure. The text of the draft declaration is attached as annex 1. Minister Wideroos said that the Council could not support the declaration at that stage of the budget procedure. Commissioner Grybauskaite indicated that she could support the EP's draft declaration.
27. Commissioner Grybauskaite said that the Commission maintained its proposals as set out in the PDB 2007. She focussed her general comments on the administrative resources issue. Separately from the Council Declaration on productivity gains, she said that the Council's approach to the 2007 budget would mean € 56 million less for salaries next year. This would mean that 801 staff would not be recruited. Further cuts proposed by Council in the DB would mean the discontinuation of 419 posts currently held by officials due to retire in the course of 2007. These 419 posts were held by the officials from the EU 15 (EU 25 excluding the ten member states that joined in May 2004). The proposed staff cuts would have a considerable negative impact on the Commission's ability to implement the next generation of EU spending programmes.
Ad hoc procedure: agriculture, fisheries, CFSP
28. Minister Wideroos set out the figures in the DB. The rapporteur and colleagues from the committee on budgets sets out their position, on the basis of the mandate report. On agriculture, concerns were expressed about voluntary modulation. On fisheries, a report on the beneficiaries of the policy was requested to accompany the Commission's autumn letter of amendment. On CFSP, the DB figures did not change relative to the PDB: the rapporteur noted that an internal cost-benefit study would be conducted in this area.
Pilot projects and preparatory actions
29. Minister Wideroos sought the EP's support to a declaration on priority areas for actions in this regard. As per the explanation in section II of this working document, the rapporteur reserved the position of the EP and questioned whether these projects could not already be carried out within existing programmes. No declarations were agreed in this area.
Financial Regulation
30. For the EP, Mrs Graessle (rapporteur on the financial regulation) underlined the importance of a rapid adoption of the new financial regulation, with the necessary improvements as voted by the European Parliament in July. This was important not least in order to ensure that spending under the new programmes could be operational on time in 2007. Minister Wideroos said that the Council was committed to adopting the new Financial Regulation as rapidly as possible and certainly by 1 January 2007, as agreed in the inter-institutional agreement (IIA) adopted on 17 May 2006, but saw no need to agree to a joint statement setting out this commitment and an indicative calendar, as had been proposed by the EP. Ms Grybauskaite supported Parliament's position and mentioned that after the adoption of the new text staff had to be trained to apply the new rules. Therefore, adoption of the text per 1 January 2007 would anyway lead to a delay in the implementation of the programmes. No joint statement was agreed.
Annex I:
Draft joint declaration of the European Parliament,
the Council and the Commission
on value for money
in the context of the annual budget procedure
The three institutions agree on the need to improve real value for money. In this context the evaluation of EU programmes should become a central part of the annual budgetary procedure.
The aim of this evaluation is to assess the quantitative and the qualitative aspects of each programme. In so doing, the points below should be noted:
· The quantitative aspect of this evaluation will be based upon the Budgetary Forecast Alert submitted twice yearly by the Commission to the Budgetary Authority.
· The qualitative aspects will be assessed by the activity statements provided by the Commission, as well as cost benefit analyses on specific EU programmes coordinated between the institutions.
The three institutions agree that they will take specific decisions on further steps in this regard by end November 2006.
on the hearings conducted in the framework of the 2007 budget procedure
"When the facts change, I change my mind, what do you do, sir?"
John Maynard Keynes
Introduction
27. One innovative element of the 2007 budget procedure so far was the decision to hold two hearings on specific areas of EU policy during the early part of the procedure. A hearing on external aspects of the 2007 budget procedure was held on 29 May. It covered trade and enlargement, and external relations and CFSP. It was followed by a hearing on internal aspects on 20 June. This hearing was opened by Commissioner Grybauskaite and was then split into three parts covering: research, innovation and energy; freedom, security and justice, and; communications policy.
28. This working document explains the background to the hearings and summarises the main ideas raised. The first section covers the arguments for organising hearings in the committee on budgets, the topics chosen for discussion, and the contribution that hearings can make to improve the value for money delivered by EU spending and in preparing for the 2008/ 2009 review of the 2007 - 2013 multi-annual financial perspective (MFF). The second and third sections set out the main points made by each invited speaker for the external and internal policy hearings respectively.
I - The reasons for holding policy hearings in the committee on budgets
Policy hearings as a tool to consider spending priorities
29. Recital E of the Parliament's resolution on the Commission's Annual Policy Strategy (APS) states that the 2007 budget "will undoubtedly have a strategic effect as regards future years". In this context, the hearings were designed to offer an opportunity for members to reflect on whether, to paraphrase Keynes, the facts had changed as regards the policy challenges facing the EU, and thus whether the priorities for spending ought not to change as well. This dovetails with the fact that prioritisation for spending is also needed to ensure value for money in light of the limited resources for EU spending available within the 2007 - 2013 MFF: a point made in the APS resolution and repeated in the mandate report for the 14 July conciliation.
Inclusive discussions on priority issues for the European Parliament
30. The hearing on external policy aspects was held first. This was in line with the European Parliament's Resolution on the Commission's Annual Policy Strategy (APS), which was supported by a large majority in plenary, paragraph 4 of which criticised the Commission for "insufficient attention...to the vast and very rapid changes underway in the global economy". The second hearing focused on key internal policy challenges. The topics for the hearings were chosen to reflect priority issues set out in the APS resolution (paragraph 6). The mixture of both external speakers and high-level participants from within the EU institutions, and including chairs of parliamentary committees, was intended to maximise the relevance of discussions to EU policy making. Sections II and III provide more details on topics and speakers for each hearing and set out the main ideas raised by each speaker.
Towards better value for money and the 2008/ 2009 review of the MFF
31. The hearings provided an opportunity for EU policy-makers and opinion formers to discuss issues of current policy relevance against a backdrop of the need to set policy priorities and ensure value for money in the EU budget. The rapporteur notes that the hearings also served to remind the other EU institutions that the Parliament is this year conducting cost-benefit studies on a number of areas of spending that will contribute to setting future priorities.
32. A broad approach to EU policies was taken at the hearings due to the short preparation time available. However, the hearings will be most effective if they become part of a process of strategic scrutiny of EU spending that delivers better value for money and policy prioritisation. The rapporteur envisages that the policy hearings should become an annual feature, at an early stage of the annual budget procedure, in order examine particular areas of spending and to stimulate thinking about the priorities for the budget exercise ahead. This process should include the active participation of the EP's specialised committees. Further, the hearings could help to foster a more strategic mindset regarding the EU budget among parliamentarians such that the EP might have a more effective role in ensuring that its priorities are fully taken into account in the forthcoming review of the MFF. On the basis of the comments made by Commissioner Grybauskaite at the internal policies hearing and by Minister Wideroos for the Council Presidency in COBU on 30 May, there appears to be significant support for a greater focus on delivering value for money in the annual budget procedure across the Commission, Council and Parliament
II - Summary of the ideas discussed at the external aspects hearing on 29 May
33. This section briefly summarises the main points made and ideas raised by each of the invited expert speakers per section of the hearing. The summary covers their opening remarks and responses to questions from members.[44].
Trade and development
34. David O'Sullivan, Director-General, DG Trade, European Commission:
· Open trade policies can make a major contribution to economic growth and development. Protectionism is not the right policy response to the economic challenges of globalisation. Increased research and development spending can also enhance economic growth.
· Trade facilitation is an area in which development objectives can be furthered by reducing the costs of onerous border procedures. The Commission committed to spend €1 billion on aid for trade annually by 2010 at the 2005 G8 summit.
· The forthcoming Commission communication on external aspects of competitiveness needs to be carefully calibrated in light of the current difficult stage of the DDA negotiations.
35. Athanissios Theodorakis, Director-General, DG Development, European Commission:
· The "European Consensus on Development" adopted by the Council, Parliament and Commission in December 2005 includes intermediate goals for Official Development Assistance (ODA) by the EU of 0.56% of GNI by 2010 with a view to achieving the UN target of 0.7% of GNI by 2015 to which the EU is committed.
· Common, agreed objectives are essential if the various aid providers are to work effectively together. This included improving co-ordination with the development aid programming of EU member states.
· The development elements of the Preliminary Draft Budget (PDB) have been proposed by the Commission according to a much simplified structure based on a reduced number of geographical and thematic instruments.
10. Ashraf Ghani, Chancellor of Kabul University (speaking note at annex I):
· State-building and market-building are the key challenges to integrate into the global system those developing countries that are currently effectively excluded from it. Development assistance should be channelled through the recipient state if it is to be most effective.
· Building an institutional framework that eliminates the scope for corruption and favours the development of a middle-class is essential to successful development and state-building.
· The proliferation of non-governmental organisations (NGOs) through which aid payments are often channelled can lead to waste through overlapping, rather than complementary, projects and detract from the primacy of the state.
· There should be improved international co-ordination with a view to producing an agreed blue-print on how to guarantee the effectiveness of state apparatus in developing countries.
11. Mirian Van Reisen, Director, Europe External Policy Advisors, in response to the questions set out in the working documents accompanying the hearing:
· Heading 4 (Europe as a global actor) was under-resourced in the Commission's 2007 Preliminary Draft Budget (PDB). Decreases in development aid resources for Asia are a bad element of the PDB.
· It is necessary to develop mechanisms to ensure that Community development assistance provided as direct budgetary support to recipient countries is used appropriately and transparently.
· The European Parliament should maintain its co-decision power in the area of development co-operation and should insist that specific budget lines are kept and are not all amalgamated in broad programmes over which the EP has no policy influence.
External relations and CFSP
12. Benita Ferrero-Waldner, European Commissioner for External Relations:
· The overall appropriations for commitments for heading 4 are a "personal disappointment", but are the best that could have been achieved in preparing the PDB further to the agreement of the new multi-annual financial framework (MFF).
· The increased resources available in the CFSP budget as a result of the recently agreed inter-institutional agreement (IIA) will allow the EU to undertake a number of new projects that will enhance the visibility of EU external actions.
· An increased focus on issues such as relations with China and India, and energy security is needed. The Commission is producing a paper for the European Council on energy security and a strategy document on relations with China is forthcoming.
13. Elmar Brok, Chairman of the AFET committee:
· The 20 percent year-on-year decrease in the figures for Heading 4 in the Commission's PDB is disappointing. The EP should begin now preparing for a full role as regards external relations spending in the 2008/ 2009 review of the MFF.
· The rationalisation of external relations instruments is generally a good idea: these must contribute to transparency in the budget.
· The CFSP budget was the "big winner" in the MFF, but the current state of affairs in which the EP often only receives real information after decisions have been taken must end: the joint information meetings on CFSP are a positive, but, ultimately, transitional arrangement.
· The persons responsible for CFSP in the Council/ Presidency should come and discuss these matters before the responsible EP committees. There should be greater synergies between CFSP and ESDP operations.
14. Robert Cooper, Director-General, External Relations, Secretariat of the Council
of Ministers (not speaking formally on behalf of the Council):
· The CFSP budget provides excellent value for money on three grounds. First, it is a means to mobilise member state resources. Second, it is a means to co-ordinate these resources. Third, it brings visibility to EU external actions.
· There should be a more "confident" relationship between the Council of Ministers and the European Parliament as regards foreign policy matters and budgetary spending.
· EU Special Representatives (EUSRs) play a valuable role. The risks that EUSRs duplicate activities that could be carried out by Commission delegations and confuse matters as regards EU external representation in third countries should not be exaggerated.
III - Summary of the ideas discussed at the internal aspects hearing on 20 June
15. This section briefly summarises the main points made and ideas raised by each of the invited expert speakers per section of the hearing. The summary covers their opening remarks and responses to questions from members[45]..
Introducing the PDB 2007 - internal policy aspects
16. Dalia Grybauskaite, European Commissioner for financial programming and budget:
· The EU budget is being re-focused towards competitiveness for growth and employment: the proportion of the EU budget spent in this area is set to rise from 6.5 % in 2006 to a projected 10.2 % in 2013.
· Spending on freedom, security and justice is due to double over the new MFF.
· The EU's annual policy planning and budget cycles should be mutually consistent and coherent.
· Welcomed the idea of improving cost-benefit approaches and noted that the Commission would operate an early-warning system to analyse the effectiveness of spending as regards a number of programmes.
Research, innovation and energy
17. Iain Begg, London School of Economics:
· The EU budget for research represents roughly 1/60th of the overall amount that would be necessary to reach the Lisbon Strategy target of research and development spending at 3% of EU GDP.
· Excellence should be the criterion according to which EU research funding is allocated: re-distribution is for other elements of the budget.
· Levels of innovation in the EU economy could also be improved by creating an environment that rewards innovation and creativity: this might be done through creating more prizes for innovation and research and via publicity material, for example.
· The rules for applying for EU research funding are at present too onerous and should be simplified wherever possible.
· Energy research is an area where the EU could look to play to its existing research strengths, including in the areas of wind-power and renewable energy technology.
18. Giles Chichester, Chairman of the ITRE committee:
· It is a disappointment that the Commission's initial proposals as regards research funding were significantly reduced in the final package for the 2007 - 2013 MFF.
· The European Research Council should play an important role in improving the co-ordination of EU research funding.
· Excellence should be the basis on which research funding is allocated.
· Research in the energy sector should also cover efficiency of energy usage and demand management.
· Simpler rules are needed to apply for EU research funding and a simpler regulatory environment for SMEs could help to boost innovation.
19. Jose-Manuel Silva Rodriguez, Director-General Research, European Commission:
· The private sector provides about two-thirds of the funds spent on research in the EU each year.
· The point about the need to simplify the procedures linked to applications for and awarding of EU research funds is frequently made.
· The ongoing revision of the Financial Regulation has a significant role to play in simplifying bureaucratic procedures linked to accessing EU funds.
· There is enough flexibility within the EU research programmes to re-allocate funds as research priorities change over time.
Freedom, Security and Justice
20. Fernando Reinares, Elcano Royal Institute:
· The EU should do more to co-ordinate efforts in the field of counter-terrorism.
· The short-term focus should be on dealing with existing threats and prevention of the emergence of new threats.
· The EU's preparedness for "aftermath measures" in the wake of a terrorist incident could be improved and better co-ordinated.
· The longer-term policy priority should be on understanding the underlying drivers that motivate terrorist actions.
21. Luciano Scagliotti, European Network Against Racism:
· A common EU migration policy is needed, without which a co-ordinated EU approach is not possible.
· There should be a greater focus on using the skills of migrants within the EU in the EU labour market.
· It is disappointing that essentially no EU funds are devoted to helping third-country nationals to integrate into the EU.
Communications policy
22. Claus Sorensen, Director-General for Communication, European Commission:
· Focussed his comments on improving the Commission's strategy as regards press relations, highlighting the need for improved co-ordination across policy areas.
· In the view of many Heads of Commission Delegations in EU member states, European media stories must be presented in "local terms" so that people can relate to them more easily.
· There is good co-operation with the European Parliament as regards the "Europe by satellite" (EbS) system.
Annex I: Speaking note of Ashraf Ghani
Presentation to European Parliament Budget Committee
I Context
· Context has changed: opportunities have changed, so have threats. Challenge from the privileged half of the world to think about the less privileged half.
· Globalization both reveals the liberating potential of the market for generating unlimited wealth, and the blindness of the market as a mechanism for distributing the consequences of this wealth. If world prosperity and security depend on leading the process of globalization towards producing equal opportunity, then the issue of creating mechanisms through which all people can participate in global prosperity must move to the forefront of the international agenda.
· Ten years ago consensus on democracy and the market, now being called into question - Latin America to Maoists in India and Nepal, wave of violence.
· Hence urgency of the need to think about different types of intervention, different time horizons, need to lead the way both out of uncertainty and to manage crises. Balance between pursuit of a common vision and flexible capacity for response in face of crisis. Need for harmonization, coordination and co-production on the international side, placing aid in the larger context of trade, and political dialogue.
· Experience in one of most difficult places, managing and advising in two brings need for focus on state-building and market building from the domestic side, and analyzing on international side.
II Focus from places that are aid recipients - state building and market building
· International political system rests on a system of states, globalization becomes possible when there is a functioning state and minimum of market institutions.
· Reality in 40-60 countries is sovereignty deficit - states which become private property of a small elite which do not deliver basic services for their citizens - and market failure - illegality, criminality and informality.
· Choice - if left to themselves, produce crisis which produce costly failures, or sustained focus on a strategy of state-building and market.
· If former choice is made increasing on European resources for crisis management, cost of human lives, and simultaneous resentment at intervention, if latter, coordination around singular goals of state-building and market-building are necessary.
· Latter choice requires rethinking both the values, goals, mechanisms, time horizons, modalities of cooperation and skills.
III From values to mechanisms
Values -
· Rule of law, representative government, regimes of citizenship rights and duties and fulfilling the rights and obligations of statehood. Requires redefinition of the legal obligations that follow from statehood. International treaties, peace agreements, constitutions contain language that are not followed up in enforcement or implementation mechanisms.
· Partly because advocacy and political dialogue is separated from humanitarian and development, and security instruments override both.
Goals
· To achieve coherence, require overarching goals - building of functioning states of markets
· Requires focus state as a legal and political organization bound by law - use of rules to create upward social, political and economic mobility.
· Europe's experience - Accession - huge success.
Mechanism
· Requires a conceptual focus on a long term vision and implementation plan, anchored in double compact between international community on one side and social compact with citizens on the other. Benchmarking of government processes to create irreversible change.
· Pragmatically, requires focus on 10 functions and how they are performed.
Time frames
· 10 to 15 years.
Modalities of cooperation
· Aid has been captured by an elite in country, and set of private companies in Europe - instead of instilling gratitude, creates resentment.
· Constraints in instruments - projects vs a coherent nationally driven strategy and programs.
· Instruments require refashioning.
· Instead of small interventions, think of larger system stability.
· Instead of just aid, think of wider instruments that are at disposal of Union and its members - trade, guarantees, convening power, Europe has considerable voice in multi-lateral institutions.
· Use voice and convening power to effect changes in multi-lateral instruments of intervention that have become outdated or inflexible.
· Money to underwrite double compact, geared to finding exit strategies.
· Bringing coherence to Europe's interventions.
· Use of twinning, Modalities where elites and publics of countries interact and understand modalities of governance.
· Given special relationship, coordination between US and EU.
IV Next steps
· Different modalities of proceeding: gradual or fundamental.
· If harmonization is to be translated into practice, requires building up of local systems - procurement, accounting, auditing. Currently, EC rules are in conflict with national systems.
· Budget as instrument of policy and accountability in countries, just as in EC.
· Use of multi-lateral trust funds as a mechanism of accountability and predictability.
· Building on experience of Accession, systematic attempt to build capacity for performance of function through benchmarking over time.
· Countries are looking for examples of success from aid - pilots become important to allow focus and create success stories.
· Choice of countries for testing this type of model, pooling of funds, creating monitoring instruments for comparison with more fragmented ways, in partnership with US and multi-laterals where key issues of selectivity and coordination can be addressed.
· Reporting - instead of thousands of reports, a single index on state effectiveness as a means of system audit, common audit, common strategy formulation and benchmarking of implementation.
V Conclusion
Requires shift from project implementation to a repertoire of roles - convenor, partner, catalyst, co-producer and monitor of development process, around the goal of state-building.
Requires articulation of a vision of the whole world - Sixty years ago security and development could be articulated for half the world. Now whole world needs to be made secure.
Europe's advantage is that it has repositioned sovereignty as critical obstacle to cooperation, and delineated path for systematic yet gradual search for collective solutions. Needs to bring this experience and imagination to both its partnership with the Atlantic and with the broader world.
on pilot projects and preparatory actions
"Small opportunities are often the beginning of great enterprises." Demosthenes
Working document on pilot projects and preparatory actions
Introduction
1. This working document sets out the situation as regards pilot projects (PPs) and preparatory actions (PAs) for the 2007 budget procedure as well as making a link with the PPs and PAs adopted for 2006. It does so in the context of the new inter-institutional agreement (IIA) of 17 May 2006 and in light of the Council's draft budget 2007.
2. The working document is structured as follows. Part I sets out the legal framework. Part II deals with PPs and PAs in the 2007 budget procedure. Part III looks at PPs and PAs from 2006 budget and earlier procedures. The Annex provides an overview of the figures for current and proposed PPs and PAs, taking into account the Council's draft budget 2007. Parts I and II are prepared under the authority of James Elles, general rapporteur for the 2007 budget. Part III is prepared under the authority of Gianni Pittella, general rapporteur for the 2006 budget
I - The legal framework for pilot projects and preparatory actions
3. PPs and PAs are an important tool for the Parliament to set out its political priorities and for introducing new initiatives outside existing legislative programmes. For PPs and PAs, the relevant budgetary decision typically precedes and may later give rise to the associated legislative decision, reversing the usual order. Article 49 of the Financial Regulation of 25 June 2002 sets out the exceptions to the general budgetary requirement that a basic act must be adopted before the budget appropriations entered for any Community action may be used. The sections of article 49 concerning PPs and PAs are point 2, letters (a) and (b) respectively.
4. The Financial Regulation defines a pilot project as a scheme "of an experimental nature designed to test the feasibility of an action and its usefulness". The Financial Regulation further states that "commitment appropriations may be entered in the budget for only two successive financial years".
5. Preparatory actions are defined by the Financial Regulation as actions "designed to prepare proposals with a view to the adoption of future actions ... The relevant commitment appropriations may be entered in the budget for only three successive years at most. The legislative procedure must be completed before the end of the third financial year".
6. Article 49 of the Financial Regulation is based upon and fully in line with article 37 of the inter-institutional agreement (IIA) of 6 May 1999, which further set a maximum annual amount of € 32 million for PPs and € 75 million for PAs. However, the 2007 budget is being prepared in the context of the new IIA of 17 May 2006. The latter agreement formally enters into force on 1 January 2007, but this working document is prepared on the basis that the IIA of 17 May 2006 sets the relevant ceilings for PPs and PAs for the 2007 budget procedure. In Annex II, section D of the 2006 IIA "the institutions agree to limit the total amount of appropriations for pilot schemes to € 40 million in any budget year. They also agree to limit to € 50 million the total amount of appropriations for new preparatory actions in any budget year, and to € 100 million the total amount of appropriations actually committed for preparatory actions".
7. With regard to the agreement of new PPs and PAs in the annual budget procedure, Section D of annex II of the 2006 IIA includes a new element. It states that "in order for the Commission to be able to assess in due time the implementability of amendments envisaged by the budgetary authority which create new preparatory actions/ pilot projects or prolong existing ones, both arms of the budgetary authority will inform the Commission by mid-June of their intentions in this regard, so that a first discussion may already take place at the conciliation meeting of the Council's first reading."
8. Given the short period of time between the agreement of the 2006 IIA and the abovementioned mid-June deadline, the Parliament was not in a position to come forward with proposals on new projects for the 2007 budget procedure within that time-frame. As set out in the rapporteur's working document 11 on the draft budget (DB) for 2007 and results of the conciliation of 14 July 2007, the Council's DB includes proposals for 2 PPs, which were not agreed at the conciliation.
9. Before a PP or PA agreed in an annual budget procedure can be implemented, it must go through certain procedures foreseen by the financial regulation. Public procurement and grants provisions apply to PPs and PAs. Article 49 of the Financial Regulation also requires the Commission to present, with the PDB, "a report to the budgetary authority ... which shall cover an assessment of the results and the follow-up envisaged". This requirement is fulfilled in "Working Document Part III - Other working documents" produced by the Commission in May 2006. The following elements from the introduction to this document provide the clearest available guide to the expenditure cycle for PPs and PAs:
"...The Commission has first to analyse the specific objectives of and ways of implementing the proposed action and, on this basis, attribute it to the responsible Directorate General. Sometimes it can take several weeks before a final decision is taken, especially when the action lies on the border line of several policy areas. The authorising officer and the manager responsible then have to elaborate a sufficiently detailed framework as foreseen by the Financial Regulation in respect of which the financing decision is finally taken. Only when all these prior phases are completed, can the financial implementation start.
... The indicative deadlines can be summarised as follows.
In the case of procurement, the preparation and the launching of the prior information notice can take from a minimum of 32 days to a maximum of 63 days. The tendering phase can take from a minimum of 85 days to a maximum of 195 days. The committing/contracting phase can take between a minimum of 55 days to a maximum of 203 days.
In the case of grants there are no compulsory deadlines to respect, except for the Annual Working Programme, which has to be adopted by 31 January of the year concerned. As soon as the AWP is adopted, the preparation of the calls for proposals takes 30 days on average, whilst the answers are usually expected after a period of two months after the publications of the calls for proposals. The evaluation of proposals depends on the number of answers received and it can take from a few days to more than 60 days when there is a large volume of responses. Once the grant agreements are signed, which takes a maximum of 30 days, the payment will be made as soon as the Commission receives the necessary information from the contractor.
The Commission would also like to point out to Parliament that if the success of a Pilot Project or a Preparatory Action is to be measured, it is much less on the speediness of the commitments or payments, and rather on the sustainability of the results produced. After a careful and successful initial analysis, the process requires constant monitoring over the lifetime of the PP/PA, and the respect of the procedures."
10. Finally, the Commission notes that there should no longer be a need for preparatory or pilot studies, which are no longer foreseen by the IIA or the Financial Regulation.
II - The 2007 budget procedure
11. This section sets out the amounts available for new PPs and APs relative to the ceilings in the 2006 IIA and in light of developments as regards PPs and APs from previous budget procedures, which are analysed in more detail in sections III. The tables in the annex set out the figures in detail. Finally, some proposals for PPs and APs for the Parliament's first reading for the 2007 budget are briefly set out.
Amounts available - pilot projects
12. As per paragraph 6, the 2006 IIA sets a limit of € 40 million for commitment appropriations for pilot projects in any budget year. The table in the annex show that the PDB included € 1 million of in commitments for the second year of the pilot project "European Destination of Excellence" (02 02 08). This would leave € 39 million available for commitment appropriations in the 2007 budget.
13. However, the Council proposed € 10 million of commitments for two new pilot projects in the 2007 DB. The proposed pilot project on "new ideas to strengthen the capacity of the knowledge triangle" (02 02 09) and the proposed pilot project on "Energy security - biofuels" (06 04 07) each have € 5 million in commitments. Taking these two proposals into account, €29 million would remain for pilot projects in the 2007 budget.
14. The European Parliament did not agree to either of these Council proposals at the 14 July conciliation. Further, they strongly criticise the Council for making proposals that would use up such a significant proportion of the commitment appropriations available as regards an aspect of the budget procedure that has traditionally allowed the European Parliament room to come forward with its own proposals.
Amounts available - preparatory actions
15. For PAs, the IIA sets a limit of € 50 million for commitments for new PAs in any given budget year and an overall limit of € 100 million for total annual commitments. The Council's DB did not change the PDB 2007 as regards PAs. Commitments appropriations for PAs total € 3.3 million. This leaves € 46.7 million for new PAs in the 2007 budget and a margin of € 96.7 million beneath the overall commitments ceiling.
Proposals for the 2007 budget procedure
16. In terms of the approach to PPs and APs for the 2007 budget, paragraph 23 of the mandate report, adopted in the committee on budgets for the July 14 conciliation, "considers that rationalisation and concentration should be an objective for the 2007 budget" in order to ensure a better level of implementation of EP proposals by the Commission. Furthermore, following the priorities set out in paragraph 6 of the APS resolution (A6-0154/2006), it seems logical to follow a thematic approach in selecting particular PPs and PAs.
III - PPs and PAs from previous budget procedures
17. As noted in the introduction, this section of the working document has been prepared under the authority of Gianni Pittella, general rapporteur for Budget 2006. The 2006 budget includes about 35 pilot projects and preparatory actions, some continued from 2005 and, others, created in 2006. It is naturally not possible to give comments on all the projects in this report. The rapporteur would therefore like to highlight the annexed overview tables provided by the Commission and the Parliament's secretariat and focus on a few selected projects that were much discussed in the 2006 procedure.
18. Members will find in annex 1 the table on PP/ PAs provided by the Commission. It should be noted that for most PP/ PAs, the preparations leading up to a grant payment, following a call for proposals, will be at least 6 months or so. In the cases of procurement (calls-for-tender) the procedures will be even longer and seldom leading to any payments or not even commitments, in the first year. The rapporteur however recalls the early cooperation with the Commission on PP/PAs in the 2006 procedure and expects that this will be reflected in the results and implementation figures at the end of the year.
19. The purpose of this document is not to discuss PP/PAs for 2007 but, for consistency, the rapporteur considers it important to point out that from 2007 the Commission proposes not to continue practically any actions in terms of commitments. All through the PDB 2007 only payments to liquidate previous commitments are maintained. All projects with payments would thus "live on" but only until these are implemented against previous commitments. Then, any actions - if still relevant - would have to be carried out/covered under the new generation of legal bases.
Pilot Project on upper secondary pupil's individual mobility (15 02 02 06)
20. The EUR 2,5 million approved for this pilot in 2006 will be used to finance an open call for tender to prepare the individual pupil mobility scheme under the new generation Life Long Learning programme (Comenius sub-programme). The rapporteur has been briefed by the Commission as to the time-table and final orientation of the project and there has been good cooperation from the Commission's side. Following the call for tender and evaluation, the financing decision and signature is foreseen to take place in September/ October 2006. The first payments should take place in late 2006 and continue over 2007. The final payment should be made in 2008. Three interim reports are planned in 2007 and the final evaluation in the first part of 2008.
21. The action has been mainly focussed to deal with a number of difficulties facing student exchanges, such as analysis of legal issues related to the mobility of minors, recognition of study periods abroad and the creation of minimum requirements for training and support for teachers, host families and mentors. The project also aims to create real exchanges between schools for the academic year 2007-2008 in a test phase, with a view to incorporate fully these actions in the new Comenius programme from 2008-2009.
22. The Commission expects to implement fully the commitments in 2006 but does not at this stage foresee any need for additional commitment appropriations in 2007. Consequently only a p.m. is proposed for 2007. The rapporteur will investigate this issue further before the first reading.
Pilot project on security along the trans-European road network (06 07 02)
23. An initial cost-benefit report with recommendations was finalised by external consultants in the spring of 2006 and its results were used to formulate the terms-of-reference for a call for proposals. This call was launched in June 2006 with a deadline of mid-August. The Commission is currently evaluating the proposals which are expected to lead to about three final contracts.
24. A global financing decision has been taken for the full amount available (EUR 5,5 million) and, once the evaluation is completed, final discussions on the approved proposals will take place with contracts expected to be signed by the end of the year. The project(s) as such should therefore be implemented as of 2007. The Commission does not wish any additional commitment appropriations for 2007 but, depending on the results, this could possibly be the case for 2008.
Pilot project on Erasmus-style programme for apprentices (15 02 23)
25. Following feasibility studies financed under the 2005 budget, a call-for-proposals was launched in July 2006. The deadline is 28 September and contracts are expected to be signed in December. The Commission is expecting to be able to sign about 10-12 contracts for approximately EUR 150.000 each. Beneficiaries could be chambers of commerce and chambres de métiers and the like.
26. In addition, a separate call-for-tender has been launched for a service-contract (maximum amount of EUR 400.000) in order to utilise an external body to actually carry out the evaluation and co-ordinate subsequent activities. This external firm will make a suggestion to the Commission as to which projects are up to standard and should be approved.
27. In total, the Commission expects to implement the full EUR 2 million voted in commitments.
28. The main focus of the projects will be to design models/networks for future apprentice exchanges, taking into account issues such as recognition between countries, common standards, legal matters etc.
29. It is possible that some "real" exchanges could also take place but these would be very limited in number and of an experimental nature. The results, nevertheless, should according to the Commission be used as a catalyst to improve the practical execution of the new Life Long Learning programme which will cover the possibility for apprentice mobility actions. A sectoral approach will be followed for the projects, i.e. each approved project will cover one specific work area. The projects should be running from the first part of 2007 to 2008 (maximum of 21 months).
Pilot project on cross-border cooperation in the fight against natural disasters
(07 04 02)
30. A call for proposals was launched in July 2006 with a deadline of 25 September. Following the evaluation phase, contracts are expected to be signed by December 2006/January 2007. A global budgetary commitment for the full amount of EUR 6,5 million will be taken before the end of the year.
31. The Commission is hoping to sign about 4-5 big contracts, which could be awarded to both public and private bodies. In practical terms, the actions will fill the gap between the current framework for cooperation in the civil protection field and the revision of the "Community Civil protection mechanism". The benefit would thus be to "anticipate" the new legal framework and allow Member States and the Commission to gain practical experience from the operational side when using multi-national teams in responding to natural disasters. The interest of the action is very high judging from an information day organised by the Commission in July and a significant number of proposals could be expected.
Natura 2000 Preparatory action (07 03 10)
32. The Commission foresees full utilisation of the EUR 2 million voted for this line. The preparatory action will be particularly used to foster integration of the Natura 2000 network into mainstream Community policies. The preparatory action will consist of three strands:
a) "Linking management and financing Natura 2000". An open call for tender was launched in May (0,5 million). Unfortunately, only one proposal was received, which is now being evaluated by the services. The objective of this tender was to organise workshops with member States, review the Natura 2000 guidebook and to prepare new IT tools.
b) Natura 2000 "preparatory activities" is scheduled to receive EUR 1 million. Many proposals were received following the call for tender. Actions will likely include the development of Natura 2000 sites, a pilot on Natura 2000 'helpdesk' (this will be in the form of a web-site development), an awareness-raising campaign and new publication material.
c) Natura 2000 "networking programme" (0,5 million)
Pilot project on European destinations of Excellence (02 02 08)
33. This project with an appropriation of EUR 1 million in 2006 (first) year will be implemented with national authorities competent in the field of tourism. The aim is to award up to 25 "destinations of excellence" aiming to promote tourism in Europe. It is foreseen that the first awards should take place at the European Forum of Tourism in 2007 and that it may become a regular award in future years. The actual project money will be used to co-finance the national selection procedures nominating the candidates, as well as financing a communication campaign and the meetings of a steering committee. A call for proposals was launched on 10 August (directed to national tourism authorities) with a deadline of 6 October. The Commission will analyse the proposals in November and is expecting to fully commit the funds and sign contracts by the end of the year. However, full utilisation of the funds depends on if every Member State will actually answer. If not, the part corresponding to that Member State(s) could not be committed. An amount of EUR 1 million has also been asked in the PDB 2007 in order to continue this action for at least the second year as a pilot project. For the longer term, the rapporteur asks the Commission to clarify which form this action could take?
Support for SMEs in the new financial environment (Item 02 02 03 02 )
34. A call-for tender was to be launched by June 2006 with an expected decision and commitment of funds by the end of the year. The Commission is not proposing to enter any further appropriations in the 2007 budget, nor proposing to give a follow-up in terms of a new legal base. It states that the "efficiency and effectiveness of mentoring service needs to be demonstrated". The rapporteur underlines that this is exactly what the pilot project is intended to do and asks the Commission to keep the Parliament fully informed during the implementation phase in 2007. He also draws attention to the remark adopted by the EP in B2006 and asks the Commission to verify how this has been taken into account in the planned implementation:
...The pilot project will also seek to ensure that experience is pooled at European level among young entrepreneurs (owners or managers of SMEs, VSEs and craft undertakings) by means of traineeships and training courses within SMEs in key or complementary sectors. The relevant representative bodies (chambers of commerce and industry and craft associations) will be responsible for supporting and promoting this programme. The beneficiaries will be young entrepreneurs (owners or managers of SMEs, VSEs and craft undertakings) who are in the process of setting up in business or are planning to transfer their business in the short to medium term...
Annex
Table 1: Summary table on Pilot projects
ABB |
DG responsible |
2005 |
2006 |
2007 |
Heading |
Budget 2005 |
Budget 2006 |
PDB 2007 |
||||
C.A. |
P.A. |
C.A. |
P.A. |
C.A. |
P.A. |
|||||||
HEADING 1a |
||||||||||||
02 02 03 01[46] |
ENTR |
PP1 |
PP2 |
|
Consolidation of internal market – pilot project for cooperation and cluster-building among small and medium-sized enterprises (SMEs) |
6.00 |
5.00 |
3.00 |
4.50 |
p.m. |
2.00 |
|
02 02 03 03 |
ENTR |
PP1 |
PP2 |
|
Transfer of expertise through mentoring in SMEs |
2.00 |
2.00 |
3.00 |
3.00 |
p.m. |
2.00 |
|
02 02 08[47] |
ENTR |
|
PP1 |
PP2 |
Pilot project on European Destination of Excellence |
- |
- |
1.00 |
0.50 |
1.00 |
0.85 |
|
04 04 05[48] |
EMPL |
PP2 |
|
|
Mainstreaming of disability actions |
3.00 |
3.00 |
p.m. |
1.50 |
p.m. |
2.00 |
|
06 07 02 |
TREN |
|
PP1 |
|
Pilot project on security along the trans-European road network |
|
|
5.50 |
5.50 |
p.m. |
3.60 |
|
15 02 02 06 |
EAC |
|
PP1 |
|
Pilot project on upper secondary pupil’s individual mobility |
|
|
2.50 |
2.00 |
p.m. |
0.50 |
|
15 02 23[49] |
EAC |
PP1 |
PP2 |
|
Erasmus-style programme for apprentices |
2.00 |
2.00 |
2.00 |
1.70 |
p.m. |
1.80 |
|
Sub-total Heading 1a |
13.00 |
|
17.00 |
|
1.00 |
|
||||||
HEADING 2 |
||||||||||||
05 01 04 06 |
AGRI |
PP2 |
|
|
Pilot project on quality promotion |
0.50 |
0.50 |
p.m. |
p.m. |
p.m. |
p.m. |
|
05 01 04 07 |
AGRI |
|
PP1 |
|
Pilot project on security fund in the fruit and vegetables sector |
- |
- |
0.50 |
0.50 |
p.m. |
p.m. |
|
Sub-total Heading 2 |
0.50 |
- |
0.50 |
|
- |
|
||||||
HEADING 3a |
||||||||||||
18 05 06 |
JLS |
PP1 |
PP2 |
|
Fight against terrorism |
7.00 |
4.00 |
9.00 |
7.00 |
p.m. |
6.00 |
|
Sub-total Heading 3a |
7.00 |
|
9.00 |
|
- |
|
||||||
HEADING 3b |
||||||||||||
07 04 02[50] |
ENV |
|
PP1 |
|
Pilot project on cross border cooperation in fight against natural disasters |
|
|
6.50 |
6.50 |
p.m. |
3.90 |
|
15 06 01[51] |
EAC |
|
PP1 |
|
Pilot project in favour of citizenship |
|
|
0.50 |
0.50 |
p.m. |
p.m. |
|
Sub-total Heading 3b |
|
|
7.00 |
|
- |
|
||||||
TOTAL Pilot Projects |
28.50[52] |
|
33.50 |
|
1.00 |
|
||||||
Annual ceiling Pilot Projects |
32.00 |
|
32.00 |
|
40.00[53] |
|
||||||
Margin left |
3.50 |
|
-1.50 |
|
39.00 |
|
||||||
ABB |
DG responsible |
2005 |
2006 |
2007 |
Heading |
Budget 2005 |
Budget 2006 |
PDB 2007 |
||||
C.A. |
P.A. |
C.A. |
P.A. |
C.A. |
P.A |
|||||||
HEADING 1a |
||||||||||||
02 02 03 02 |
ENTR |
AP2 |
AP3 |
|
Support for SMEs in the new financial environment |
8.00 |
8.00 |
7.00 |
7.00 |
p.m. |
7.00 |
|
02 04 02 |
ENTR |
AP2 |
AP3 |
|
Preparatory action for research in the field of security |
15.00 |
8.00 |
15.00 |
19.00 |
p.m. |
6.00 |
|
04 03 06[54] |
EMPL |
|
AP1 |
|
ENEA preparatory action on active ageing and mobility of elder people |
(p.m.) |
(3.00) |
1.50 |
0.75 |
- |
- |
|
06 04 03 01 |
TREN |
AP2 |
AP3 |
|
Security of conventional energy supplies |
p.m. |
p.m. |
0.50 |
0.90. |
p.m. |
0.70 |
|
09 03 03[55] |
INFSO |
|
AP1 |
AP2 |
Preparatory action for the creation of an Internet-based system for better legislation and for public participation |
|
|
2.00 |
2.00 |
2.30 |
1.80 |
|
Sub-total Heading 1a |
23.00 |
|
26.00 |
|
2.30 |
|
||||||
HEADING 1b |
||||||||||||
05 04 03 01 |
AGRI |
AP2 |
|
|
Preparatory action for the development of an European Forest Information and Communication Platform (EFICP) |
0.50 |
0.50 |
p.m. |
0.34 |
p.m. |
0.38 |
|
05 08 03 |
AGRI |
AP3 |
|
|
Restructuring of systems for agricultural surveys |
0.90 |
0.90 |
p.m. |
0.50 |
-. |
- |
|
Sub-total Heading 1b |
1.40 |
|
- |
|
- |
|
||||||
HEADING 3a |
||||||||||||
18 03 05[56] |
JLS |
AP3 |
|
|
European Migration Monitoring Centre |
3.00 |
3.80 |
p.m[57]. |
1.80 |
p.m. |
2.00 |
|
18 03 06 |
JLS |
AP2 |
AP3 |
|
Integration of nationals of non-members countries |
5.00 |
6.000 |
5.00 |
5.75 |
p.m. |
6.45 |
|
18 03 08 |
JLS |
AP1 |
AP2 |
|
Financial instrument for return management in the area of migration |
15.00 |
8.00 |
15.00 |
10.00 |
p.m. |
12.50 |
|
18 04 03 |
JLS |
AP2 |
AP3 |
|
Research and evaluation programme on respect for fundamental rights |
1.00 |
1.40 |
0.50 |
1.00 |
p.m. |
0.80 |
|
18 04 04 |
JLS |
AP2 |
AP3 |
|
Support of Civil society in the new Member States |
2.00 |
2.00 |
1.00 |
1.00 |
p.m. |
2.80 |
|
18 05 01 03 |
JLS |
PP2 |
AP1 |
|
Exchange programme for judicial authorities |
(3.00) |
2.50 |
3.00 |
2.80 |
p.m. |
1.00 |
|
18 05 04 |
JLS |
PP2 |
AP1 |
|
Preparatory action in favor of the victims of terrorist acts |
(2.00) |
1.00 |
2.00 |
1.20 |
p.m. |
1.20 |
|
Sub-total Heading 3a |
26.00 |
|
26.50 |
|
- |
|
||||||
HEADING 3b |
||||||||||||
07 03 10[58] |
ENV |
|
AP1 |
AP2 |
NATURA 2000 preparatory action |
|
|
2.00 |
2.00 |
1.00 |
1.60 |
|
17 03 04 |
SANCO |
|
AP1 |
|
Preparatory action – Public Health |
|
|
2.00 |
1.04 |
p.m. |
0.96 |
|
19 04 04[59] |
AIDCO |
PP2 |
AP1 |
|
Preparatory action to establish a conflict prevention network |
p.m. |
0.90 |
1.50 |
1.13 |
p.m. |
1.25 |
|
19 06 02 02[60] |
AIDCO |
PP2 |
AP1 |
|
Preparatory action to reduce NBC weapons and small arms |
(3.00) |
3.00 |
3.00 |
2.50 |
p.m. |
2.00 |
|
22 02 05 05[61] |
ELARG |
AP3 |
|
|
Impact of enlargement in EU border regions |
4.00 |
16.98 |
p.m. |
0.40 |
p.m. |
3.00 |
|
22 02 05 06[62] |
ELARG |
PP2 |
AP1 |
|
Completion of preparatory action on demining activities in Cyprus |
p.m. |
p.m. |
1.00 |
1.00 |
p.m. |
0.40 |
|
Table 2: Summary table on Preparatory actions (continued)
Sub-total Heading 3b |
14.00 |
|
19.50 |
|
1.00 |
|
|||||||||
TOTAL Preparatory Actions |
64.40[63] |
|
72.00 |
|
3.30 |
|
|||||||||
Annual ceiling Preparatory Actions |
75.00 |
|
75.00 |
|
100.00[64] |
|
|||||||||
Margin left |
10.60 |
|
3.00 |
|
96.70 |
|
|||||||||
Source: European Commission
on the role of NGO's in implemeting EU development policy
The role of NGOs in implementing EU development policy
"However fragmented the world, however intense the national rivalries, it is an inexorable fact that we become more interdependent every day."
Jacques Yves Cousteau
Introduction
1. This working document is in three parts. The first section provides data on the involvement of non-governmental organisations (NGOs) in implementing EU development policy, in the context of earlier work conducted by the European Parliament in this regard. Section two briefly sets out the link between this issue and the 2007 budget procedure, in particular the value for money approach and the hearing on external policies that was held on 30 May in the committee on budgets and included a presentation by Ashraf Ghani, Chancellor of Kabul University and former Finance Minister of Afghanistan. The third section sets out options for further work and analysis in this area by the European Parliament and committee on budgets.
Section I - NGOs and EU development policy
2. Taken together with bilateral development assistance by EU member states and monies paid through the European Development Fund (EDF), the European Union is the world's largest provider of development assistance. NGOs are involved in the implementation of each of these channels of EU development assistance. This working document focuses on development assistance provided through European Community channels, on which the European Parliament has co-decision powers and discharge authority and thus an obligation to scrutinise implementation. NGOs are extensively involved in the implementation of the EU's external relations and development programmes. Out of a total volume of approximately € 5.1 billion under heading 4 of the EU Budget in 2005, it can be estimated that some € 800 to € 900 million are allocated to NGOs alone, i.e. some 15-18%[65].
3. It should be noted, however, that the previous Commission at one point put the figure at some € 1.6 billion. Following various demands for clarifications by the Committee on Budgets, these figures were eventually adjusted downwards as they also included various other "non-state actors", such as universities, churches, foundations, trade unions etc. In the 2004 procedure, the general rapporteur (Mr Mulder, ALDE) concluded an estimated figure of € 1 billion going to NGOs.
4. If all non-state actors are included, counting also "international organisations" such as the UN agencies and the Red Cross family, the relevant figure is likely to amount to over € 2 billion, possibly even up to € 2,5 billion, i.e. half of the total aid volume disbursed under heading 4 of the budget.
5. The share of NGO funding in the external actions budget seems to have been relatively stable, and relatively high, over the 2000-2006 financial perspective.
6. The main areas of NGO spending under heading 4 are the following (nomenclature re-structured in PDB 2007):
· Non-State actors in development (21 03), which was formerly the two lines for NGO co-financing and decentralised cooperation (nomenclature change in 2007 PDB)
· Interventions under thematic programmes/budget lines (such as human rights and democracy)
· Interventions under geographical programmes
· Interventions through ECHO (humanitarian aid)
The bulk of interventions here lie with the thematic actions and NGO co-financing, whereas the NGO participation in the geographical programmes seems to be more limited.
7. The Budgets Committee has looked into various budgetary and accountability aspects of NGOs during this period. The committee has scrutinised aspects such as:
· overall share of NGO funding in heading 4;
· elements of such funding that follow the normal rules of tendering;
· elements of such funding that are given using the exception of "direct allocation" in the financial regulation;
· indications as to the administrative costs of NGO projects funded by the Commission;
· Commission activities to monitor the accountability of NGO beneficiaries;
· overall funding structure of NGOs (share of funding from government and non-government sources respectively).
8. In the budgets for 2004 and 2005 especially, this led to the creation of various reserves which received broad support in the committee on budgets. The Commission was asked to provide extensive evidence to the committee. It should be noted that the Commission complied with the requests, producing quite extensive reports. Eventually, the reserves were lifted either in 2nd reading or through transfers during the budget year.
9. In the Budget 2006 procedure similar reserves were created, this time with the objective of shedding more light on funding going to international organisations, most notably the UN system, the World Bank and the Red Cross family. The Commission again provided quite detailed replies in the form of a new report sent to the EP in November, which allowed the reserves to be lifted in 2nd reading.
10. The Budgets Committee has thus probed quite deeply into the organisation and "grip" on NGO-funding the Commission has been able to demonstrate. When this process started, there were no adequate systems and procedures in place to produce aggregate figures. In the last few years, there has been considerable improvement, at least from a budgetary information point of view, and the Commission has been cooperative.
Section II - from improved budgetary information to qualitative value for money
11. The three key themes of the European Parliament's approach to the 2007 budget procedure as set out in its resolution on the Commission's Annual Policy strategy are: setting policy priorities; qualitative value for money; and preparing for the 2008/ 2009 mid-term review of the 2007 - 2013 multi-annual financial framework (MFF). The committee on budgets has implemented a number of innovative approaches during its examination of the 2007 budget with a view to delivering improved qualitative value for money. These approaches included: policy hearings; the production of cost-benefit studies on a number of areas of EU policy, including development policy; and a reinforced linkage between the annual budget and discharge procedures through a number of budget amendments linked to a thorough examination of documents examining the implementation of EU policies, such as the special reports of the Court of Auditors.
12. The Committee held a policy hearing in May 2006 on external policy issues. One of the political conclusions drawn from the hearing on external actions in the 2007 budget was that the role of NGOs must be compatible with the aim of "ownership" of external assistance programmes by the recipient countries. Care should be taken that the NGOs (and the international aid system in general) should not directly take over tasks that should really be provided by states themselves. There is a need for countries to take responsibility for their own development and international aid should support the strengthening of domestic capacities to achieve this rather than substituting them. It is important that NGO interventions do not neglect or contradict efforts made by emerging democratic states. This point was particularly emphasised by Ashraf Ghani, who argued strongly that the state must be the primary channel through which development assistance should flow in order to foster strong domestic institutions. Strong institutions were, he said, a necessary condition for development assistance to be translated into durable progress in economic, social and democratic terms.
13. The next logical step for the Parliament would be to build on the earlier work on NGO financing in the committee on budgets and the initial output of the external policies hearing through analysis focussing on the qualitative value-for-money of EU funds in the area of development assistance. The cost-benefit analysis report by Economisti Associati on "assessment of budgetary resources and means in the area of development and co-operation" conducted on behalf of the committee on budgets in the context of the 2007 budget procedure could be seen as first step in this process.
14. The need for such an approach and for further work in this area would seem to be supported by the findings of this study, the key elements of which can be summarised as:
· high diversity between NGOs (good performers and bad performers) but insufficient evaluations in many areas to properly assess cost effectiveness;
· high variance of support costs between NGOs, some managing to channel over 80% of funds to the final beneficiaries whereas others only manage 30%;
· no systematic evidence that NGOs are more cost-effective than government institutions.
Section III - options for further work in the committee on budgets
15. Based on the above analysis of previous work in this area and analysis conducted in the context of the 2007 budget procedure, the rapporteur would like to propose three ideas as regards future work in this area.
16. Firstly, the rapporteur considers that in light of the success of the policy hearings held in May and June 2006 (summarised in the rapporteur's working document 12), the committee on budgets might consider holding further similar hearings during 2007. As regards, the role of NGOs in implementing development assistance, this might be the subject of a hearing focussed on external policies in the early part of 2007 and aiming to inform the Parliament's approach to priorities for external policies for the 2008 budget. Any such hearings should, in the rapporteur's view, be conducted in close co-operation with the relevant specialised committees.
17. Secondly, the rapporteur considers that further analysis might be conducted looking more specifically at the role of NGOs in ensuring qualitative value for money in EU external development assistance. This might be done using the research budget to which the committee on budgets has recourse. Analysis might make a qualitative comparison of the effectiveness of aid implemented through a variety of channels. In order to come to well-grounded conclusions, such analysis would likely need to be based on detailed case-study work on a small selection of programmes. The geographical and sectoral breadth of the programmes to be analysed would probably have to be carefully selected and controlled in order to ensure a reasonable degree of comparability of results.
18. Thirdly, the rapporteur suggests that the committee on budgets might reflect on the tools available to it in the annual budgetary and discharge procedures that might enable it to ensure better qualitative value for money as regards NGO involvement in development assistance. Where appropriate and reliable information is available from cost-benefit studies, reports of the court of auditors and other sources, this might be used as a basis for budgetary amendments that aim to ensure that money is being spent in the most effective and efficient way possible given the difficult conditions that often pertain in poorer countries.
on delivering value for money
Introduction
1. This working document provides further information on the rapporteur's strategy as regards delivering value for money in the 2007 budget procedure. The first section provides an overview of the value for money amendments proposed by the rapporteur. The second section makes suggestions on process as to how Parliament might effectively scrutinise information provided by the Commission in advance of the second reading on the 2007 budget and regarding the release of amounts placed in reserve. The annex provides detailed information about the problems identified on each budget line for which a value for money amendment is proposed and the conditions for release.
I - Overview of the value for money amendments and proposals for follow-up
2. Delivering value for money has been one of the three key pillars of the Parliament's strategy as regards the 2007 budget procedure. The rapporteur has prepared four blocks of horizontal amendments on the value for money approach. These are based on information provided in: the Court of Auditors Special reports; the synthesis reports of the Commission's management of financial resources; the cost-benefit studies produced at the request of the committee on budgets; the Budget Forecast Alert produced by the Commission.
· Special reports of the Court of Auditors
3. In its Special Reports, the Court of Auditors examines whether financial operations related to particular programmes and activities have been properly recorded, legally and regularly executed and managed so as to ensure economy, efficiency and effectiveness. The horizontal amendments were based on the problems and weaknesses identified in the special reports examined during the 2004 discharge exercise and those released since. The Commission's replies to the observations of the Court are included in each report. The Commission's 2004 follow-up report, responding to the remarks made by the European Parliament in the 2004 discharge report, arrived after the submission of these amendments.
· Synthesis reports of the Commission's management of financial resources
4. The annual synthesis report contains a summary and overview of the state of management in the Commission based on the Annual Activities Reports (AAR) prepared by the various D-Gs. Each AAR contains a declaration of assurance signed by the director-general concerning the sound financial management and control of the resources for which they are responsible, and the legality and regularity of the underlying transactions. Particular problems, for which it is not proved possible to give such assurances, are subject to reservations. The AAR sets out the action planned by the Commission to address such weaknesses.
· Cost-benefit studies
5. Cost-benefit studies were carried out on behalf of the committee on budgets in the context of the 2007 budget procedure, further to paragraph 36 of Parliament's resolution on the Commission's APS resolution, which "proposes to ask for cost-benefit studies to be carried out on specific areas of the budget using part of the resources allocated to the parliamentary committees ". Amendments were proposed based on an analysis of the studies on: LIFE; Lifelong learning; Citizenship; Information Policy; Development co-operation.
· Budget Forecast Alert
6. The Budget Forecast Alert is a new tool prepared by the Commission to assess the quality of implementation and therefore qualitative value for money for particular areas of EU spending. The rapporteur has made use of this information to propose amendments on 7 budget lines on which implementation rates appear unsatisfactory.
7. For each of these sets of amendments, the rapporteur proposes to place 30% of the relevant commitment and payment appropriations in reserve for the related budget lines, pending information and improvements regarding the problems identified.
II - Suggested process for scrutinising Commission responses and releasing funds
8. In line with the approach set out above, the rapporteur has placed amounts in reserve on a number of lines in order to clarify whether spending in these areas is delivering effective qualitative and quantitative value for money. The rapporteur proposes that the amounts in reserve should be released in the following way:
(i) The Commission should provide a response, including a calendar for redressing problems wherever necessary, for each of the problems identified;
(ii) A COBU hearing, possibly held jointly with COCOBU, would allow the Commission to present publicly the information relating to the release of the reserve. In light of the timetable for the second reading, this meeting should take place at the latest on the afternoon of 16 November.
(iii) On the basis of its assessment of the information provided by the Commission, Parliament would then be in a position to lift the relevant reserves before the second reading on the 2007 budget;
9. In order to improve the level of detail available to members regarding this approach, the annex sets out details on the specific problems identified for each budget line on which horizontal amendments are proposed, and a greater degree of detail regarding the conditions for releasing amounts placed in reserve in the horizontal amendments proposed by the rapporteur.
ANNEX
VALUE FOR MONEY - AMENDMENTS BASED ON COURT OF AUDITORS SPECIAL REPORTS
(30% in reserve for CAs and PAs for budget lines where weaknesses have been identified by the CoA)
Amendment 3814 : budget line 04 02 19 : European Social Fund (ESF) — Regional competitiveness and employment
Justification for placing 30% of appropriations in reserve and conditions for release:
In line with paragraphs 5 and 7 of the APS resolution (P6_TA-PROV(2006)0221), adopted by the European Parliament on 18 May 2006, relating to value for money and cost-effectiveness, 30% of the resources for this budget line are placed in reserve until the Commission addresses the weaknesses in management and implementation highlighted in Special report no 1/2006 of the Court of Auditors, which include an inadequate analysis of problems in Member States before ESF funding decisions are taken, poorly justified overall funding levels and regional allocations, and insufficient information to allow an assessment of the impact of spending.
Before Parliament's second reading, the Commission should provide information on:
- measures taken and/or envisaged by the Commission in co-operation with the Member States in order to better assess the needs and the situation prior to funds´ allocation and to ensure that clear and well-justified criteria for allocation of funds between regions and between different activities are applied,
- measures taken and/or envisaged by the Commission in order to address the need for a coherent and consistent strategy, including such elements as a common definition of ESL, more consistent criteria for identifying target groups, more specific quantitative goals along with reasonable annual targets, etc.,
- measures taken and/or envisaged as concerns better use of information in the monitoring and control of the financial management by the Member States.
Amendment 3813 : budget line 06 03 03 : Financial support for projects of common interest in the trans-European transport network
Justification for placing 30% of appropriations in reserve and conditions for release:
According to Special Report 6/2005 of the Court of Auditors, 14 TEN-T priority projects are currently behind schedule. Problems with cross-border sections are particularly acute and financial aid is not sufficiently focussed on cross-border projects. Evaluations and selections of proposals were carried out by the Commission in an ad hoc manner, and in the absence of documented and publicly available guidelines. The coordination of Community funding of transport infrastructure within the European Union does not allow the Commission to identify all cases of over- or even double-funding. Appropriations should be placed in reserve until the Commission addresses these weaknesses.
Before Parliament's second reading, the Commission should provide:
- confirmation that specific evaluation guidelines have been established, especially for TEN-T;
- confirmation that external experts/firms are extensively used for evaluations since it is not credible that they are carried out by the same people who are implementing the programme;
- confirmation that the first major ex-post evaluation planned for TENs, i.e for the 2000-2006 programme, will be carried out by independent experts;
- a clear description of how the Commission, in collaboration with Member States, intends to work to detect and minimise the risk of over - or double-funding
Amendment 3815 :
budget line 05 02 08 01 : Export refunds for fruit and vegetables
budget line 05 02 08 02 : Compensation for withdrawals and buying-in
budget line 05 02 08 03 : Operational funds for producer organisations
budget line 05 02 08 04 : Production aid for processed tomato products
budget line 05 02 08 05 : Production aid for fruit-based products
budget line 05 02 08 06 : Intervention for dried grapes and figs
budget line 05 02 08 07 : Compensation to encourage processing of citrus fruits
budget line 05 02 08 08 : Free distribution of fruit and vegetables
budget line 05 02 08 09 : Aid to producer groups for preliminary recognition
Justification for placing 30% of appropriations in reserve and conditions for release:
According to Special Report 8/2006 of the Court of Auditors, the Commission's target of 60 % of supply concentrated in producer organisations by 2013 will not be reached: producer organisations account for only about one-third of the EU's fruit and vegetable production and they have grown at a lower rate than the sector as a whole.
Appropriations should be placed in reserve until the Commission addresses these weaknesses.
Before Parliament's second reading, the Commission should report on:
- improvements in achieving the objectives set for the aid scheme and in the Commission's monitoring of the effectiveness of the aid:
- the reasons for the relative lack of progress by producer organisations, particularly in those Member States where the fruit and vegetables sector represents the highest proportion of agricultural output.
Amendment 3800 : budget line 05 04 05 01 : Rural development programmes
Justification for placing 30% of appropriations in reserve and conditions for release:
According to Special Report 9/2004 of the Court of Auditors, the impact of measures for afforestation of agriculture land has been low: the degree of afforestation is not significant and the result could be obtained more cheaply. The projects financed lead to dispersed and uncoordinated implementation in rural areas. Overall forestry action is not sufficiently targeted. Paying agencies in some new Member States are still not accredited. According to Special Report 3/2005 of the Court of Auditors, the Commission has not sufficiently verified the correct functioning of agri-environment support control systems in the Member States, particularly concerning organic farming. According to Special Report 7/2006 of the Court of Auditors, support for rural areas has decreased markedly compared to the previous programming period (1994-1999) and funds have not been targeted on the most needy geographical areas and beneficiaries.
Appropriations should be placed in reserve until the Commission addresses these weaknesses.
Before Parliament's second reading, the Commission should provide information on:
- how it intends to improve the targeting and cost-efficiency of forestry measures within rural development policy and a timetable for the completion of the accreditation process for the paying agencies in the new Member States;
- how it intends to work with the Member States to improve the verification of agri-environment expenditure.
Amendment 3801 : budget line 19 08 01 01 : European Neighbourhood and Partnership (ENP) financial cooperation with Mediterranean countries
Justification for placing 30% of appropriations in reserve and conditions for release:
According to Special Report 5/2006 of the Court of Auditors, Commission management of MEDA has improved since the early years and can now be considered satisfactory but many projects are still not completed and concrete results remain, after more than 10 years of MEDA, limited.
According to Special Report 10/2004 of the Court of Auditors on the devolution of external aid, better indicators of speed and quality of aid delivery are needed and delays in project implementation should be reduced. Given the completely new landscape of implementation of external aid following devolution over the course of the current financial perspective, there is a need to take stock of results before fully authorising the funds requested for external programmes from 2007 and onwards. This is also the case since the Court of Auditors has previously pointed out the need to monitor the costs of devolution to delegations against the results.
Appropriations should therefore be placed in reserve until the Commission:
- explains the reasons for and indicate the measures taken as regards unfinished projects;
- clarifies how the balance between budget support funding, which has been increasing, and traditional project funding is decided;
- explains the inter-relationship between devolution of aid programmes to the EC delegations and the trends in expenditure observed. This shall include an analysis of operational vs. administrative costs and the split between headquarters and delegations, including aspects of staff, temporary staff, and other types of support expenditure;
- clarifies whether it now considers the working relationship between headquarters and delegations as satisfactory or which additional measures will still need to be put in place;
- clarifies whether the need for simplification with regard to delegation procedures has now been completed. If not, what new measures have been proposed, i.e. within the framework of the new regulation?
Amendment 3802 : budget line 19 08 01 02 : European Neighbourhood and Partnership (ENP) financial assistance to Palestine and to the peace process
According to Special Report 10/2004 of the Court of Auditors on the devolution of external aid, better indicators of speed and quality of aid delivery are needed and delays in project implementation should be reduced. Given the completely new landscape of implementation of external aid following devolution over the course of the current financial perspective, there is a need to take stock of results before fully authorising the funds requested for external programmes from 2007 and onwards. This is also the case since the Court of Auditors has previously pointed out the need to monitor the costs of devolution to delegations against the results.
Appropriations should be placed in reserve until the Commission addresses these weaknesses.
Before Parliament's second reading, the Commission should:
- explain the inter-relationship between devolution of aid programmes to the EC delegations and the trends in expenditure observed. This shall include an analysis of operational vs. administrative costs and the split between headquarters and delegations, including aspects of staff, temporary staff, and other types of support expenditure;
- clarify whether it now considers the working relationship between headquarters and delegations as satisfactory or which additional measures will still need to be put in place;
- clarify whether the need for simplification with regard to delegation procedures has now been completed. If not, what new measures have been proposed, i.e. within the framework of the new regulation?
Amendment 3803 : budget line 19 08 01 03 : European Neighbourhood and Partnership (ENP) financial cooperation with eastern Europe
Justification for placing 30% of appropriations in reserve and conditions for release:
In its Special Report 2/2006 on TACIS, the Court of Auditors examines projects in Russia, which is the highest recipient of funds, and notes, inter alia, low effectiveness and objectives not achieved for a majority of projects examined, lack of dialogue with beneficiaries, lack of local ownership of programmes, no co-financing used, problems with terms of references and evaluations. Only 9 of 29 projects audited achieved their objectives, 8 achieved them partially and 12 failed to achieve them. The results of only 5 of the audited projects were found to be sustainable. The Court concluded that the effectiveness of the use of TACIS funds in the Russian Federation has been very low and it was therefore unable to give a positive assessment of performance.
According to Special Report 10/2004 of the Court of Auditors on the devolution of external aid, better indicators of speed and quality of aid delivery are needed and delays in project implementation should be reduced. Given the completely new landscape of implementation of external aid following devolution over the course of the current financial perspective, there is a need to take stock of results before fully authorising the funds requested for external programmes from 2007 and onwards. This is also the case since the Court of Auditors has previously pointed out the need to monitor the costs of devolution to delegations against the results.
Appropriations should be placed in reserve until the Commission addresses these weaknesses.
Before Parliament's second reading, the Commission should:
- clarify how the shortcomings noted have been addressed in the new Neighbourhood programme and any new country strategy proposed for Russia;
- clarify how the project cycle will be/has been improved to avoid the habitual delays associated with this programme;
- state the concrete measures taken to improve involvement of beneficiaries;
- explain the inter-relationship between devolution of aid programmes to the EC delegations and the trends in expenditure observed. This shall include an analysis of operational vs. administrative costs and the split between headquarters and delegations, including aspects of staff, temporary staff, and other types of support expenditure;
- clarify whether it now considers the working relationship between headquarters and delegations as satisfactory or which additional measures will still need to be put in place;
- clarify whether the need for simplification with regard to delegation procedures has now been completed. If not, what new measures have been proposed, i.e. within the framework of the new regulation?
Amendment 3804 : budget line 19 09 01 : Cooperation with developing countries in Latin America
Justification for placing 30% of appropriations in reserve and conditions for release:
According to its Special Report 6/2006, the Court of Auditors considers that reporting, monitoring and evaluation systems covering the environmental aspects of the Commission's development cooperation need to be strengthened. Almost all of the environment projects examined were relevant to beneficiary country needs, and frequently also addressed global conservation needs but outputs and results frequently fell short of objectives.
According to Special Report 10/2004 of the Court of Auditors on the devolution of external aid, better indicators of speed and quality of aid delivery are needed and delays in project implementation should be reduced. Given the completely new landscape of implementation of external aid following devolution over the course of the current financial perspective, there is a need to take stock of results before fully authorising the funds requested for external programmes from 2007 and onwards. This is also the case since the Court of Auditors has previously pointed out the need to monitor the costs of devolution to delegations against the results.
Appropriations should be placed in reserve until the Commission addresses these weaknesses.
Before Parliament's second reading, the Commission should:
- provide a clear overview of the new provisions/measures foreseen for the new generation of external programmes 2007-2013 to improve the integration of environmental aspects into development programmes;
- list concrete measures already decided/implemented following the establishment of the Commission steering-group to improve quality and coordination of environmental aspects in external programmes;
- explain the inter-relationship between devolution of aid programmes to the EC delegations and the trends in expenditure observed. This shall include an analysis of operational vs. administrative costs and the split between headquarters and delegations, including aspects of staff, temporary staff, and other types of support expenditure;
- clarify whether it now considers the working relationship between headquarters and delegations as satisfactory or which additional measures will still need to be put in place;
- clarify whether the need for simplification with regard to delegation procedures has now been completed. If not, what new measures have been proposed, i.e. within the framework of the new regulation?
Amendment 3805 : budget line 19 10 01 : Cooperation with developing countries in Asia
Justification for placing 30% of appropriations in reserve and conditions for release:
According to Special Report 4/2005 of the Court of Auditors, application procedures for funding are excessively complex, delegations should assist applicants more and there should be a greater focus on sustainability of projects. According to its Special Report 6/2006, the Court of Auditors considers that reporting, monitoring and evaluation systems covering the environmental aspects of the Commission's development cooperation need to be strengthened. Almost all of the environment projects examined were relevant to beneficiary country needs, and frequently also addressed global conservation needs but outputs and results frequently fell short of objectives.
According to Special Report 10/2004 of the Court of Auditors on the devolution of external aid, better indicators of speed and quality of aid delivery are needed and delays in project implementation should be reduced. Given the completely new landscape of implementation of external aid following devolution over the course of the current financial perspective, there is a need to take stock of results before fully authorising the funds requested for external programmes from 2007 and onwards. This is also the case since the Court of Auditors has previously pointed out the need to monitor the costs of devolution to delegations against the results.
Appropriations should be placed in reserve until the Commission addresses these weaknesses.
Before Parliament's second reading, the Commission should:
- provide a clear overview of the new provisions/measures foreseen for the new generation of external programmes 2007-2013 to improve the integration of environmental aspects into development programmes;
- list concrete measures already decided/implemented following the establishment of the Commission steering-group to improve quality and coordination of environmental aspects in external programmes;
- explain the inter-relationship between devolution of aid programmes to the EC delegations and the trends in expenditure observed. This shall include an analysis of operational vs. administrative costs and the split between headquarters and delegations, including aspects of staff, temporary staff, and other types of support expenditure;
- clarify whether it now considers the working relationship between headquarters and delegations as satisfactory or which additional measures will still need to be put in place;
- clarify whether the need for simplification with regard to delegation procedures has now been completed. If not, what new measures have been proposed, i.e. within the framework of the new regulation?
Amendment 3806 : budget line 19 10 02 : Cooperation with developing countries in Central Asia
Justification for placing 30% of appropriations in reserve and conditions for release:
According to Special Report 10/2004 of the Court of Auditors on the devolution of external aid, better indicators of speed and quality of aid delivery are needed and delays in project implementation should be reduced. Given the completely new landscape of implementation of external aid following devolution over the course of the current financial perspective, there is a need to take stock of results before fully authorising the funds requested for external programmes from 2007 and onwards. This is also the case since the Court of Auditors has previously pointed out the need to monitor the costs of devolution to delegations against the results.
Appropriations should be placed in reserve until the Commission addresses these weaknesses.
Before Parliament's second reading, the Commission should:
- explain the inter-relationship between devolution of aid programmes to the EC delegations and the trends in expenditure observed. This shall include an analysis of operational vs. administrative costs and the split between headquarters and delegations, including aspects of staff, temporary staff, and other types of support expenditure;
- clarify whether it now considers the working relationship between headquarters and delegations as satisfactory or which additional measures will still need to be put in place;
- clarify whether the need for simplification with regard to delegation procedures has now been completed. If not, what new measures have been proposed, i.e. within the framework of the new regulation?
Amendment 3807 : budget line 19 10 03 : Cooperation with developing countries east of Jordan
Justification for placing 30% of appropriations in reserve and conditions for release:
According to Special Report 10/2004 of the Court of Auditors on the devolution of external aid, better indicators of speed and quality of aid delivery are needed and delays in project implementation should be reduced. Given the completely new landscape of implementation of external aid following devolution over the course of the current financial perspective, there is a need to take stock of results before fully authorising the funds requested for external programmes from 2007 and onwards. This is also the case since the Court of Auditors has previously pointed out the need to monitor the costs of devolution to delegations against the results.
Appropriations should be placed in reserve until the Commission addresses these weaknesses.
Before Parliament's second reading, the Commission should:
- explain the inter-relationship between devolution of aid programmes to the EC delegations and the trends in expenditure observed. This shall include an analysis of operational vs. administrative costs and the split between headquarters and delegations, including aspects of staff, temporary staff, and other types of support expenditure;
- clarify whether it now considers the working relationship between headquarters and delegations as satisfactory or which additional measures will still need to be put in place;
- clarify whether the need for simplification with regard to delegation procedures has now been completed. If not, what new measures have been proposed, i.e. within the framework of the new regulation?
Amendment 3810 : budget line 21 06 02 : Relations with South Africa
Justification for placing 30% of appropriations in reserve and conditions for release:
According to Special Report 10/2004 of the Court of Auditors on the devolution of external aid, better indicators of speed and quality of aid delivery are needed and delays in project implementation should be reduced. Given the completely new landscape of implementation of external aid following devolution over the course of the current financial perspective, there is a need to take stock of results before fully authorising the funds requested for external programmes from 2007 and onwards. This is also the case since the Court of Auditors has previously pointed out the need to monitor the costs of devolution to delegations against the results.
Appropriations should be placed in reserve until the Commission addresses these weaknesses.
Before Parliament's second reading, the Commission should:
- explain the inter-relationship between devolution of aid programmes to the EC delegations and the trends in expenditure observed. This shall include an analysis of operational vs. administrative costs and the split between headquarters and delegations, including aspects of staff, temporary staff, and other types of support expenditure;
- clarify whether it now considers the working relationship between headquarters and delegations as satisfactory or which additional measures will still need to be put in place;
- clarify whether the need for simplification with regard to delegation procedures has now been completed. If not, what new measures have been proposed, i.e. within the framework of the new regulation?
Amendment 3808 : budget line 22 02 01 : Transition and institution-building assistance to candidate countries
Justification for placing 30% of appropriations in reserve and conditions for release:
According to Special Report 4/2006 of the Court of Auditors, projects audited were in line with PHARE investment objectives. However, for over half of them the assets were not, or were only partially, being used for the intended purpose, and outputs and results lagged considerably behind schedule due to the continuing lack of administrative capacity and national resources.
According to Special Report 10/2004 of the Court of Auditors on the devolution of external aid, better indicators of speed and quality of aid delivery are needed and delays in project implementation should be reduced. Given the completely new landscape of implementation of external aid following devolution over the course of the current financial perspective, there is a need to take stock of results before fully authorising the funds requested for external programmes from 2007 and onwards. This is also the case since the Court of Auditors has previously pointed out the need to monitor the costs of devolution to delegations against the results.
Appropriations should be placed in reserve until the Commission addresses these weaknesses.
Before Parliament's second reading, the Commission should:
- explain the inter-relationship between devolution of aid programmes to the EC delegations and the trends in expenditure observed. This shall include an analysis of operational vs. administrative costs and the split between headquarters and delegations, including aspects of staff, temporary staff, and other types of support expenditure;
- clarify whether it now considers the working relationship between headquarters and delegations as satisfactory or which additional measures will still need to be put in place;
- clarify whether the need for simplification with regard to delegation procedures has now been completed. If not, what new measures have been proposed, i.e. within the framework of the new regulation?
Amendment 3809 : budget line 22 02 01 : Transition and institution-building assistance to potential candidate countries
Justification for placing 30% of appropriations in reserve and conditions for release:
According to Special Report 10/2004 of the Court of Auditors on the devolution of external aid, better indicators of speed and quality of aid delivery are needed and delays in project implementation should be reduced. Given the completely new landscape of implementation of external aid following devolution over the course of the current financial perspective, there is a need to take stock of results before fully authorising the funds requested for external programmes from 2007 and onwards. This is also the case since the Court of Auditors has previously pointed out the need to monitor the costs of devolution to delegations against the results.
Appropriations should be placed in reserve until the Commission addresses these weaknesses.
Before Parliament's second reading, the Commission should:
- explain the inter-relationship between devolution of aid programmes to the EC delegations and the trends in expenditure observed. This shall include an analysis of operational vs. administrative costs and the split between headquarters and delegations, including aspects of staff, temporary staff, and other types of support expenditure;
- clarify whether it now considers the working relationship between headquarters and delegations as satisfactory or which additional measures will still need to be put in place;
- clarify whether the need for simplification with regard to delegation procedures has now been completed. If not, what new measures have been proposed, i.e. within the framework of the new regulation?
Amendment 3811 : budget line 24 01 06 : European Anti-fraud Office (OLAF)
Justification for placing 30% of appropriations in reserve and conditions for release:
According to Special Report 1/2005 of the Court of Auditors, investigations take too long, it is difficult to assess the results achieved and follow-up is rudimentary; OLAF's scarce resources should be targeted towards areas in which the risk of fraud detrimental to the Union's financial interests is greatest.
Appropriations should be placed in reserve until the Commission addresses these weaknesses.
Before Parliament's second reading, the Commission should:
- report on improvements in the office's managerial supervision and on how the serious delays in the processing of files and the lodging of inconclusive reports can be reduced.
Amendment 3812 : budget line 31 01 06 01 : Interpreting and conference expenditure
Justification for placing 30% of appropriations in reserve and conditions for release:
According to Special Report 5/2005 of the Court of Auditors, capacity for interpreting into and out of the languages of new Member States is insufficient and the cost of interpretation could be reduced with better management.
Appropriations should be placed in reserve until the Commission addresses these weaknesses.
Before Parliament's second reading, the Commission should provide a note explaining how it intends to reinforce cooperation with the new Member States with a view to training new interpreters in the new languages and an action plan for better management with a view to reducing costs, including the following elements:
- a reduction in the cost of 'standby' interpretation services that are paid for but not used, whilst ensuring that reserve interpreters can be found at short notice;
- a reduction in the cost of auxiliary conference interpreters through better coordination of travel and accommodation costs which are a large part of the cost of such interpreters.
Amendment 3816 : budget line 31 01 07 01 : Support services for the «Translation» Directorate-General
Justification for placing 30% of appropriations in reserve and conditions for release:
According to Special Report 9/2006 of the Court of Auditors, management of translation services should be improved in the face of steadily growing demand, internal capacity for translation of the languages of the new Member States is insufficient, better interinstitutional cooperation in terms of sharing spare capacity is needed, and the efficiency of the translation process should be improved. Appropriations should be placed in reserve until the Commission addresses these weaknesses.
Before Parliament's second reading, the Commission should:
- provide a note describing how it intends to streamline procedures for the management of translation services, scope for further interinstitutional cooperation and possibilities for improving the efficiency of the translation process;
- carry out a review of EPSO's inability to recruit sufficient translators for the languages of the new Member States in time, and prepare an action plan of the steps needed to rectify this problem and ensure that the same problem is not repeated for the candidate countries.
VALUE FOR MONEY: AMENDMENTS BASED ON THE 2005 SYNTHESIS OF COMMISSION MANAGEMENT
(30% in reserve for CAs and PAs for budget lines where weaknesses have been identified by the synthesis report)
Amendment 3831 : budget line 02 03 04 : Standardisation and approximation of legislation
Justification for placing 30% of appropriations in reserve and conditions for release:
DG ENTR is responsible for the management of the Internal Market for goods. This activity comprises the management of legislation (including infringements) in a range of technically complex areas, many of which have an impact on public health and consumer safety. The DG’s activities in this area are complemented by the work of the three recognised European Standardisation Organisations (ESOs) for which the Commission provides financial support.
In 2004, the ex-post control team confirmed some overpayments related to one of the
ESOs[66]. First corrective measures were taken already in 2004 and continued in 2005 aiming to reduce the risk of errors in the cost claims of the ESOs. These measures included discussion with ESOs, inter alia, of draft guidelines on the implementation of the framework partnership agreement.
Appropriations should be placed in reserve until the Commission provides evidence that these weaknesses have been addressed.
Before Parliament's second reading, the Commission should:
- confirm that the beneficiaries have put in place the necessary systems and procedures to be able to produce the required documentation and justifications to the European Commission, in order to obtain assurance that the Commission and the ESOs share the same understanding of the agreed financial rules;
- provide evidence that the full application of the guidelines on the implementation of the Framework Partnership Agreement 2004-2007, issued in February 2006, is ensured and that transparency of the financial management of the grants for the ESOs has improved
- report on the envisaged revision of existing contracts with regards to the determination of eligible costs and on the control of real costs by means of on-site checks and desk checks when assessing cost claims and on the organisation of audits of the ESOs accounting systems.
Amendment 3832 : budget line 06 05 02 : Nuclear Safety
Justification for placing 30% of appropriations in reserve and conditions for release:
In its Annual Activity Report 2005, referred to in the Synthesis Report of the Commission (COM(2006)277final), DG TREN expresses a reservation concerning nuclear safety due to a lack of sufficient means in terms of legal instruments and staffing in order to evaluate the level of nuclear safety of the nuclear power stations in the enlarged European Union - the Commission risks not being in a position to ensure the application of high safety standards in the field of nuclear energy. The adoption of the relevant legislative instruments ("Nuclear Package") is a priority action needed in order to give the Commission the necessary legal instruments for ensuring a sufficient level of control.
Appropriations should be placed in reserve until the Commission addresses these weaknesses.
Before Parliament's second reading, the Commission should confirm that it has been granted sufficient specialised staff in order to be in a position to evaluate the level of nuclear safety of the nuclear power stations in the enlarged European Union.
Amendment 3839 : budget line 08 02 01 : Cooperation - Health
Amendment 3840 : budget line 08 03 01 : Cooperation - Food, agriculture and biotechnology
Amendment 3841 : budget line 08 04 01 : Cooperation - Nanosciences, nanotechnologies, materials and new production technologies
Amendment 3842 : budget line 08 05 01 : Cooperation - Energy
Amendment 3843 : budget line 08 06 01 : Cooperation - Environment (including climate change)
Amendment 3844 : budget line 08 07 01 : Cooperation - Transport (including aeronautics)
Amendment 3845 : budget line 08 08 01 : Cooperation - Socio-economic sciences and the humanities
Amendment 3846 : budget line 08 10 01 : Ideas
Amendment 3847 : budget line 08 11 01 : People
Amendment 3848 : budget line 08 12 01 : Capacities - Research infrastructures
Amendment 3849 : budget line 08 13 01 : Capacities - Research for the benefit of SMEs
Amendment 3850 : budget line 08 14 01 : Capacities - Regions of knowledge
Amendment 3851 : budget line 08 15 01 : Capacities - Research potential
Amendment 3852 : budget line 08 16 01 : Capacities - Science in society
Amendment 3853 : budget line 08 17 01 : Capacities - Activities of international cooperation
Amendment 3854 : budget line 08 19 01 : Euratom - Fusion energy
Amendment 3855 : budget line 08 19 02 : Euratom - Joint undertaking ITER
Amendment 3856 : budget line 08 20 01 : Euratom - Nuclear fission and radiation protection
Justification for placing 30% of appropriations in reserve and conditions for release:
In its Annual Activity Report 2005, referred to in the Synthesis Report of the Commission (COM(2006)277final), DG Research expresses a reservation concerning the verification of the exactitude of the costs as declared by beneficiaries concerning contracts under the 5th Framework Programme for Research. The exactitude of these costs, and their conformity with the provisions of the research contracts, cannot be completely and accurately verified by the Commission as part of its normal checks carried out prior to authorisation of payments.
Appropriations should be placed in reserve until the Commission addresses these weaknesses.
Before Parliament's second reading, the Commission should provide information on the steps taken to address this problem under the current 7th Framework Programme for Research.
Amendment 3834 : budget line 18 03 03 : European Refugee Fund
Justification for placing 30% of appropriations in reserve and conditions for release:
According to DG JSL[67], deficiencies in key elements of the United Kingdom's management of expenditure have been noted, including in the control by the Member State of the eligibility of expenditure and in the necessity of carrying out a minimum 20% audit of expenditure declared at final beneficiary level. It does not, therefore, have reasonable assurance as regards the effective operation of key elements of the management and control systems put in place by the UK National Authority to ensure legality and regularity of transactions at final beneficiary level.
Appropriations should be placed in reserve until the Commission addresses these weaknesses.
Before Parliament's second reading, the Commission should:
- reported on a reinforced monitoring by the unit responsible for this programme (regular follow-up by desk officer and access provided to the UK responsible authority for key questions on management and implementation to the desk officer);
- produce detailed guidance on the implementation of ERF II for the Member States (seminars planned on key topics, such as the role of the audit authority and eligibility of expenditure) and report back to Parliament.
Amendment 3833 : budget line 22 02 04 01 : Cross-border cooperation (CBC) between IPA countries
Justification for placing 30% of appropriations in reserve and conditions for release:
In its Annual Activity Report 2005, referred to in the Synthesis Report of the Commission (COM(2006)277final), DG Enlargement expresses a reservation related to the sharing of responsibilities between the Commission and the UN in the framework of the implementation of the EU contribution to UNMIK pillar IV in Kosovo. Clear irregularities have occurred in the use of the finances provided by the EU but the UN does not accept responsibility for the financial management of these funds and is not prepared to reimburse to the EU the amount affected by the irregularities.
Appropriations should be placed in reserve until the Commission addresses these weaknesses.
Before Parliament's second reading, the Commission should provide information on steps taken to clarify the allocation of responsibility for the financial management of the EU contribution to UNMIK pillar IV in Kosovo.
Amendment 3837 : budget line 16 01 01 01 : Expenditure related to staff in active employment of ‘Communication’ policy area: Headquarters
Justification for placing 30% of appropriations in reserve and conditions for release:
In its Annual Activity Report 2005, referred to in the Synthesis Report of the Commission (COM(2006)277final), DG Communication expresses a reservation on financial management related to the absence of an ex-post financial control system.
Appropriations should therefore be placed in reserve until the Commission provides a report on progress in the introduction of a structured ex-post control system in DG Communication.
Amendment 3835 : budget line 19 01 01 01 : Expenditure related to staff in active employment of «External relations» Directorates-General
Justification for placing 30% of appropriations in reserve and conditions for release:
In its Annual Activity Report 2005, referred to in the Synthesis Report of the Commission (COM(2006)277final), DG External Relation expresses a reserve due to insufficient implementation of internal control standards at headquarters, particularly concerning standards 12 (management information) and 17 (supervision).
Appropriations should be placed in reserve until the Commission addresses these weaknesses.
Before Parliament's second reading, the Commission should provide evidence that the internal control standards are in place at headquarters, particularly standards 12 and 17.
Amendment 3836 : budget line 19 01 01 02 : Expenditure related to staff in active employment of «External relations» delegations
Justification for placing 30% of appropriations in reserve and conditions for release:
In its Annual Activity Report 2005, referred to in the Synthesis Report of the Commission (COM(2006)277final), DG External Relation expresses a reserve due to insufficient implementation of internal control standards in the delegations, particularly concerning standard 16 concerning the segregation of duties (financial circuits).
Appropriations should be placed in reserve until the Commission addresses these weaknesses.
Before Parliament's second reading, the Commission should provide evidence that the internal control standards are in place in the delegations, particularly standard 16.
VALUE FOR MONEY: AMENDMENTS BASED ON COST BENEFIT STUDIES
(30% in reserve for CAs and PAs for budget lines where weaknesses have been identified)
Amendment 3150 : budget line 07 01 04 01 : LIFE+ (Financial Instrument for the Environment — 2007 to 2013) — Projects on Community territory — Part I (nature protection) — Expenditure on administrative management
Justification for placing 30% of appropriations in reserve and conditions for release:
In line with paragraphs 5 and 7 of the APS resolution (P6_TA-PROV(2006)0221), adopted by the European Parliament on 18 May 2006, relating to value for money and cost-effectiveness, and the evaluation of a number of policies and programmes made in the studies commissioned by the Committee on Budgets, 30% of the resources for this budget line are placed in reserve until the Commission can provide clarification on the weaknesses identified in the European Parliament's internal study on LIFE programme (PE no 371.841), chapter 4.2, paragraph 4 - 5.
Before Parliament's second reading, the Commission should provide a satisfactory explanation of the reasons for the nearly double increase in staff dealing with the Life+ programme as compared to the Life III programme.
Amendment 3090 : budget line 15 02 22 Lifelong learning programme
Justification for placing 30% of appropriations in reserve and conditions for release:
In line with para 5 and 7 of the APS resolution (P6_TA-PROV(2006)0221), adopted by the European Parliament on 18 May 2006, relating to value for money and cost-effectiveness, and the evaluation of a number of policies and programmes made in the studies commissioned by the Committee on Budgets, 30% of the resources for this budget line are placed in reserve until the Commission provide proposals for dealing with the problem of cumbersome and cost-intensive management process identified in chapter 3.1.2 of the CEPS study on education policy "Citizenship and Educations Policies - Value for Money?" of 12/09/2006.
Before Parliament's second reading, the Commission shall inform the Budgetary Authority of its efforts to further simplify procedures, reduce administrative costs and take due account of the legitimate interest of the beneficiaries of the programme while applying the provisions of the Financial Regulation.
Amendment 3091 : budget line 15 06 66 Citizens for Europe
Justification for placing 30% of appropriations in reserve and conditions for release:
In line with para 5 and 7 of the APS resolution (P6_TA-PROV(2006)0221), adopted by the European Parliament on 18 May 2006, relating to value for money and cost-effectiveness, and the evaluation of a number of policies and programmes made in the studies commissioned by the Committee on Budgets, 30% of the resources for this budget line are placed in reserve.
Before Parliament's second reading, the Commission should provide information on measures taken to address the following weaknesses highlighted in the EP resolution on "Citizens for Europe" of 5 April 2006:
- cost effectiveness is not satisfactory as paperwork required is excessive. The Commission applies the rules of the financial regulation No 1605/2002/CE blindly, without taking into account the overriding principle of proportionality, especially when small amounts of funding are at stake or small beneficiaries are involved
- Commission staff implementing the programme change jobs too often, so that beneficiaries feel left alone in front of the paperwork required.
- no database of beneficiaries seems to be established at inter-DG level. In consequence, justifications and certificates are requested various times during the procedure, which involves considerable additional costs for beneficiaries.
and in the CEPs study on citizenship:
- objectives concerning Town twinning and support for Associations are not sufficiently structured in hierarchical terms
Amendment 3181 : budget line 16 03 02 : Local actions
Justification for placing 30% of appropriations in reserve and conditions for release:
The decentralised information has been established to be more adapted to the needs of national audiences. However there are a number of weaknesses in the way citizens are informed and on the contents of the information provided.
Appropriations should be placed in reserve until the Commission addresses these weaknesses.
Before Parliament's second reading, the Commission should present evidence of improvements in terms of projects, decentralisation, staff and flexibility in particular in the field of the administration
Amendment 3180 : budget line 16 03 04 : Specific actions on priority themes, of which PRINCE
Justification for placing 30% of appropriations in reserve and conditions for release:
The Prince program was the first to develop campaigns on the euro, enlargement and on the future of the EU to communicate with the public. However by multiplying the campaigns it missed its targets.
Appropriations should be placed in reserve until the Commission addresses these weaknesses.
Before Parliament's second reading, the Commission should present an action plan which defines realistic objectives, the number of actions and target groups, and gives more flexibility, in particular in the field of the administration.
Amendment 3183 : budget line 16 04 01 : Public opinion analysis
Justification for placing 30% of appropriations in reserve and conditions for release:
The cost-benefit study in the field of information shows that the Eurobarometer is extremely relevant in giving an overview of public opinion on key policy issues ad public opinion trends in the EU but it is essentially a passive information tool that does not seek to extend or increase public awareness and information.
Appropriations should be placed in reserve until the Commission addresses these weaknesses.
Before Parliament's second reading, the Commission should present a new strategy for the Eurobarometer more focused on accurate and policy-relevant questions and on how to raise the awareness of citizens.
Amendment 3182 : budget line 16 04 02 : Online information and communication tools
Justification for placing 30% of appropriations in reserve and conditions for release:
The EUROPA website is one of the most popular and most referenced public websites in the world . However it has as several weaknesses such as a non harmonised presentation, a lack of coherence amongst DGs and a non reliable search engine.
Appropriations should be placed in reserve until the Commission addresses these weaknesses.
Before Parliament's second reading, the Commission should present a new strategy more oriented to non-expert public and quickly implemented.
Amendment 3060 :
budget line 19 01 02 01 : External staff of «External relations» Directorates-General
budget line 19 01 02 02 : External staff of «External relations» delegations
budget line 19 01 02 11 : Other management expenditure of «External relations» Directorates-General
budget line 19 01 02 12 : Other management expenditure of «External relations» delegations
budget line 19 01 03 01 : Expenditure related to equipment and services of «External relations» Directorates-General
budget line 19 01 03 02 : Buildings and related expenditure of «External relations» delegations
Justification for placing 30% of appropriations in reserve and conditions for release:
According to the cost-benefit study on development cooperation, data published by the OECD and the Commission itself indicate that the administrative costs of development aid programmes have more than doubled over the current financial perspective. Having been a low-cost donor with less than 3% going towards administrative costs in 2000, it is claimed that the Commission is now a high-cost donor with administrative costs reaching 6 to 7% of operational expenditure. This is higher than practically any Member State. It is therefore proposed to put 30% of administrative costs of the DGs under heading 4 (external actions) in reserve pending further clarifications as to the amounts asked and the worrying trend observed.
In order to release the reserves, either fully or partially, before Parliament's second reading, the Commission shall:
- justify the administrative share compared to other EU donors
- explain the sharp rise in such costs over the current FP
- set out its reasons for requesting these appropriations in relation to the overall objective, i.e. to ensure high quality external programmes that contribute, inter alia, to the millennium development goals while ensuring that as high a proportion of funds as possible reach the final beneficiaries.
- set out any measures taken to halt this rise in administrative expenditure
Amendment 3061 :
budget line 20 01 02 01 : External staff of «Trade» Directorate-General
budget line 20 01 02 02 : External staff of «Trade» delegations
budget line 20 01 02 11 : Other management expenditure of «Trade» Directorate-General
budget line 20 01 02 12 : Other management expenditure of «Trade» delegations
budget line 20 01 03 01 : Expenditure related to equipment and services of «Trade» Directorate-General
budget line 20 01 03 02 : Buildings and related expenditure of «Trade» delegations
Justification for placing 30% of appropriations in reserve and conditions for release:
According to the cost-benefit study on development cooperation, data published by the OECD and the Commission itself indicate that the administrative costs of development aid programmes have more than doubled over the current financial perspective. Having been a low-cost donor with less than 3% going towards administrative costs in 2000, it is claimed that the Commission is now a high-cost donor with administrative costs reaching 6 to 7% of operational expenditure. This is higher than practically any Member State. It is therefore proposed to put 30% of administrative costs of the DGs under heading 4 (external actions) in reserve pending further clarifications as to the amounts asked and the worrying trend observed.
In order to release the reserves, either fully or partially, before Parliament's second reading, the Commission shall:
- justify the administrative share compared to other EU donors
- explain the sharp rise in such costs over the current FP
- set out its reasons for requesting these appropriations in relation to the overall objective, i.e. to ensure high quality external programmes that contribute, inter alia, to the millennium development goals while ensuring that as high a proportion of funds as possible reach the final beneficiaries.
- set out any measures taken to halt this rise in administrative expenditure
Amendment 3062:
budget line 21 01 02 01 : External staff of «Development» Directorates-General
budget line 21 01 02 02 : External staff of «Development» delegations
budget line 21 01 02 11 : Other management expenditure of «Development» Directorates-General
budget line 21 01 02 12 : Other management expenditure of «Development» delegations
budget line 21 01 03 01 : Expenditure related to equipment and services of «Development» Directorates-General
budget line 21 01 03 02 : Buildings and related expenditure of «Development» delegations
Justification for placing 30% of appropriations in reserve and conditions for release:
According to the cost-benefit study on development cooperation, data published by the OECD and the Commission itself indicate that the administrative costs of development aid programmes have more than doubled over the current financial perspective. Having been a low-cost donor with less than 3% going towards administrative costs in 2000, it is claimed that the Commission is now a high-cost donor with administrative costs reaching 6 to 7% of operational expenditure. This is higher than practically any Member State. It is therefore proposed to put 30% of administrative costs of the DGs under heading 4 (external actions) in reserve pending further clarifications as to the amounts asked and the worrying trend observed.
In order to release the reserves, either fully or partially, before Parliament's second reading, the Commission shall:
- justify the administrative share compared to other EU donors
- explain the sharp rise in such costs over the current FP
- set out its reasons for requesting these appropriations in relation to the overall objective, i.e. to ensure high quality external programmes that contribute, inter alia, to the millennium development goals while ensuring that as high a proportion of funds as possible reach the final beneficiaries.
- set out any measures taken to halt this rise in administrative expenditure
Amendment 3063 :
budget line 22 01 02 01 : External staff of «Enlargement» Directorate-General
budget line 22 01 02 02 : External staff of «Enlargement» delegations
budget line 22 01 02 11 : Other management expenditure of «Enlargement» Directorate-General
budget line 22 01 02 12 : Other management expenditure of «Enlargement» delegations
budget line 22 01 03 01 : Expenditure related to equipment and services of «Enlargement» Directorate-General
budget line 22 01 03 02 : Buildings and related expenditure of «Enlargement» delegations
Justification for placing 30% of appropriations in reserve and conditions for release:
According to the cost-benefit study on development cooperation, data published by the OECD and the Commission itself indicate that the administrative costs of development aid programmes have more than doubled over the current financial perspective. Having been a low-cost donor with less than 3% going towards administrative costs in 2000, it is claimed that the Commission is now a high-cost donor with administrative costs reaching 6 to 7% of operational expenditure. This is higher than practically any Member State. It is therefore proposed to put 30% of administrative costs of the DGs under heading 4 (external actions) in reserve pending further clarifications as to the amounts asked and the worrying trend observed.
In order to release the reserves, either fully or partially, before Parliament's second reading, the Commission shall:
- justify the administrative share compared to other EU donors
- explain the sharp rise in such costs over the current FP
- set out its reasons for requesting these appropriations in relation to the overall objective, i.e. to ensure high quality external programmes that contribute, inter alia, to the millennium development goals while ensuring that as high a proportion of funds as possible reach the final beneficiaries.
- set out any measures taken to halt this rise in administrative expenditure
Amendment 3066:
budget line 23 01 02 01 : External staff
budget line 23 01 02 11 : Other management expenditure
budget line 23 01 04 01 : Humanitarian aid — Expenditure on administrative management
Justification for placing 30% of appropriations in reserve and conditions for release:
According to the cost-benefit study on development cooperation, data published by the OECD and the Commission itself indicate that the administrative costs of development aid programmes have more than doubled over the current financial perspective. Having been a low-cost donor with less than 3% going towards administrative costs in 2000, it is claimed that the Commission is now a high-cost donor with administrative costs reaching 6 to 7% of operational expenditure. This is higher than practically any Member State. It is therefore proposed to put 30% of administrative costs of the DGs under heading 4 (external actions) in reserve pending further clarifications as to the amounts asked and the worrying trend observed.
In order to release the reserves, either fully or partially, before Parliament's second reading, the Commission shall:
- justify the administrative share compared to other EU donors
- explain the sharp rise in such costs over the current FP
- set out its reasons for requesting these appropriations in relation to the overall objective, i.e. to ensure high quality external programmes that contribute, inter alia, to the millennium development goals while ensuring that as high a proportion of funds as possible reach the final beneficiaries.
- set out any measures taken to halt this rise in administrative expenditure
- [1] COM(2004) 101 final and COM (2004)498 final
- [2] A6-0153/2005
- [3] SI(2005)961, Draft Joint Declaration "Guidelines for legislative proposals related to the 2007-2013 multiannual financial framework" sent by the UK Presidency for the Coreper meeting of 25/10/2005
- [4] In case of an agreement later in the year the Commission should present an Amending Letter once the agreement is achieved to adjust the ceilings.
- [5] DT\589812
- [6] ) OJ L 176 of 15 July 2003, p. 29-37.
- [7] Freedom of movement and solidarity in the area of external borders, asylum and immigration programme COM(2005)0123; Security programme COM(2005)0124; Justice and fundamental rights programme COM(2005)0122
- [8] Texts Adopted, 8.6.2005, P6_TA-PROV(2005)0224
- [9] Texts Adopted, 8.6.2005, P6_TA-PROV(2005)0224.
- [10] DT\605113EN, PE
- [11] PR\607623EN, PE
- [12] 6671 - FIN 68 para. 6-8
- [13] Texts Adopted, 8.6.2005, P6_TA-PROV(2005)0224.
- [14] this corresponds to about 250m/year on average. The PDB for 2007 proposes EUR 159 million. Appropriations in 2006 were 102 million.
- [15] These two regulations are virtually identical but one covers 'developing countries' (adopted in co-decision) and the other covers 'third countries (adopted under consultation).
- [16] the other lines of the EIDHR are: 19 04 01: European Inter-university Centre (Venice), 19 04 02: Support for the victims of human rights abuses, 19 04 04: Support for the International Criminal Court,
19 04 05: Preparatory action to establish a conflict-prevention network - [17] Reports SEGELSTRÖM (COM(2005)0122), KUDRYCKA (COM(2005)0123), LA RUSSA (COM(2005)0124); The opinion of the Budget committee were drafted by Neena Gill, Kathelijne Buitenweg, Louis Grech, Simon Busuttil, Gerard Deprez, Yannick Vaugrenard, Ville Itälä.
- [18] COM(2002) 311 final of 5 June 2002
- [19] European Agency for Reconstruction and EU Translation Centre only have p.m. entries in the PDB 2007 and have been excluded from this comparison
- [20] ) See Point 28 of the resolution.
- [21] ) Texts adopted, P6_TA(2005)0224.
- [22] ) The other 3 Specific Programmes concern:
* EURATOM
* the Joint Research Centre (EC)
* the Joint Research Centre (EURATOM) - [23] ) See Opinions by Ms Xenogiannakopoulou.
- [24] Annex 1 of the Commission Proposal for a Specific Programme "Cooperation" COM (2005)440
- [25] ) According to the MFF 2007-2013 a maximum amount of EUR 3 284 million is foreseen for the CIP for the period 2007-2013 (overall level for commitment appropriations).
- [26] For example European Parliament 2006/179/EC, Euratom -Final adoption of the general budget of the European Union for the financial year 2006, OJ L 78 of 15 March 2006, p. 935 - 1005 under Title "Area of Freedom. Security and Justice"
- [27] see Annex VI to document SEC(2006)231, document II, point 4.6, p. 100
- [28] Having "ring fenced" for the first time the amounts allocated to "Justice, Freedom and Security" in a specific subheading in the MFF marks the priority given to it compared to the period 2000 - 2006 and ensures increased visibility and a stable financial basis to its policies as the Commission can not easily reshuffle its budget to other policy areas.
- [29] Somewhat confusingly, this Commission DG is sometimes referred to by the abbreviation of DG JLS.
- [30] under part "Co-operation" a budget line 02 04 01 called "Security and Space Research" gets underway in 2007 with EUR 171,7 million in commitment appropriations
- [31] European Parliament resolution of 18 May 2006 on the 2007 budget: the Commission's Annual Policy Strategy report (APS), P6_TA-PROV(2006)0221
- [32] point 22 and 23 of the APS resolution
- [33] SEC(2006)231, document II, point 3.18, p.54
- [34] OJ L 78 of 15 March 2006, p. 935
- [35] Reports SEGELSTRÖM (COM(2005)0122), KUDRYCKA (COM(2005)0123), LA RUSSA (COM(2005)0124); The opinion of the Budget committee were drafted by Neena Gill, Kathelijne Buitenweg, Louis Grech, Simon Busuttil, Gerard Deprez, Yannick Vaugrenard, Ville Itälä
- [36] Available via http://www.iom.int/en/news/prwmr2005%5Fpresskit%5Fen.shtml
- [37] The Commission wrongly states (SEC(2006)231, document I, point 3.4, p.26): "In the field of migration, from 2007, the main financing instruments will be the European Refugee Fund (EUR 61,3 million) "
- [38] CNS2005/0038
- [39] COM(2005)236 report COELHO
- [40] COM(2004)835 report LUDFORD
- [41] The Commisson has presented a separate "Report on Pilot Projects and Preparatory
Actions (article 49, point 2 letter b of the Financial Regulation)", COM(2006)300, p. 40 - [42] COM(2005)0124 – 2005/0034(CNS)
- [43] Taking into account the final draft estimates of the institutions other than the Commission, the rectified PDB amounts to € 126 776 million in commitments and € 116 370 million in payments.
- [44] Based upon notes provided by the secretariat of the committee on budgets.
- [45] Based upon notes provided by the secretariat of the committee on budgets.
- [46] Line 02 02 01 02 in 2006
- [47] Line 02 02 09 in 2006
- [48] Line 04 04 10 in 2006
- [49] Line 15 03 01 05 in 2006
- [50] Line 07 03 06 03 in 2006
- [51] Line 15 06 01 09 in 2006
- [52] This amount includes pilot project 17 01 04 04 (EUR 0.50), not confirmed in 2006, as well as pilot projects 18 05 01 03 (EUR 3.00 million), 18 05 04 (EUR 2.00 million) and 19 02 12 (EUR 3.00 million) all transformed in preparatory actions in 2006
- [53] Ceiling of the new IIA
- [54] Line 04 04 08 in 2006
- [55] Line 09 03 06 in 2006
- [56] A Green Paper on the future of the European Migration Network (COM (2005) 606 final) was published in November 2005 in order to seek views on the possible follow-up to this preparatory action.
- [57] An amount of EUR 3.00 million in CA and of EUR 1.00 million in PA were entered in reserve in the budget 2006
- [58] Line 07 03 03 02 in 2006
- [59] Line 19 04 05 in 2006
- [60] Line 19 02 12 in 2006
- [61] Line 22 02 07 in 2006
- [62] Line 22 02 09 in 2006
- [63] This amount includes preparatory action 04 04 02 03 (EUR 0.50 million) concluded in 2005
- [64] Ceiling of the new IIA, including EUR 50 million for new preparatory actions
- [65] Estimation based on NGO data provided by the Commission in 2004, and the cost-benefit study on development in the framework of the 2007 budget procedure.
- [66] CEN, CENELEC and ETSI http://ec.europa.eu/atwork/synthesis/doc/entr_aar.pdf
- [67] http://ec.europa.eu/atwork/synthesis/doc/jls_aar.pdf
OPINION of the Committee on Foreign Affairs (15.9.2006)
for the Committee on Budgets
on the draft general budget of the European Union for the financial year 2007
(C6-0299/2006 - 2006/2018(BUD))Section III – Commission
Draftsperson: István Szent-Iványi
SUGGESTIONS
The Committee on Foreign Affairs calls on the Committee on Budgets, as the committee responsible, to incorporate the following suggestions in its motion for a resolution:
1. Regrets that the structure of the 2007 PDB, based on the merger of several previously separate budget lines, hinders effective parliamentary oversight and adequate priority setting; welcomes in this context the agreement reached on the pre-accession, new neighbourhood and stability instruments after the exchange of letters between the institutions, which, inter alia, outline the mechanisms for implementing the declarations on democratic scrutiny and coherence of external actions attached to the interinstitutional agreement on budgetary discipline and sound financial management, since such agreement provides for greater insight into the implementation of the Community's financial assistance;
2. Points out that, since the Commission has submitted a proposal for a separate instrument for human rights, the budget nomenclature needs to be adapted to the new situation;
3. Takes the view that recourse to the margin of EUR 110 million available under heading 4 is unavoidable, given the number of already identifiable challenges;
4. Considers that the EU should focus its limited financial resources on regions and issues where its assistance can make a real difference;
5. Reaffirms the need to earmark sufficient resources for implementing the EU's Thessaloniki Agenda and facilitating the gradual European integration of the Western Balkan countries, and insists on the inclusion in the budget of an indicative breakdown of allocations per country to allow better oversight and comparison;
6. Expects the Council and the Commission to keep Parliament fully informed about preparations for the future EU mission in Kosovo; urges them to use CFSP/ESPD mechanisms and Community resources in a coordinated and coherent fashion so as to optimise their impact;
7. Will agree to a substantial increase of CFSP expenditure only if the provisions of the Interinstitutional Agreement on budgetary discipline and sound financial management are strictly complied with;
8. Stresses the need gradually to achieve a proportionally equal allocation of resources for the European Neighbourhood and Partnership (ENP) financial co-operation both with Mediterranean countries and Eastern European countries, in order to strengthen stability, security and democracy throughout Europe and beyond;
9. Reiterates its view that, with the exception of humanitarian aid, assistance to governments should not be provided if the governments are responsible for clear worsening of the situation in the fields of democracy, the rule of law and respect for fundamental rights and freedoms;
10. Considers that activities to protect and promote human rights in the world should be financed under the European Instrument for Democracy and Human Rights without prejudice to the funds to be earmarked for those policies under the corresponding geographical instruments;
11. Takes the view that proper internal and external communication is an integral part of the EU’s external and enlargement policies, and calls for adequate resources to be allocated for that purpose.
PROCEDURE
Title |
The draft general budget of the European Union for the financial year 2007 - Section III - Commission |
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References |
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Committee responsible |
BUDG |
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Opinion by |
AFET |
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Draftsperson |
István Szent-Iványi 25.1.2006 |
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Discussed in committee |
20.6.2006 |
11.7.2006 |
12.9.2006 |
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Date adopted |
12.9.2006 |
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Result of final vote |
+: –: 0: |
37 2 3 |
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Members present for the final vote |
Panagiotis Beglitis, Bastiaan Belder, Monika Beňová, Elmar Brok, Paul Marie Coûteaux, Simon Coveney, Véronique De Keyser, Giorgos Dimitrakopoulos, Maciej Marian Giertych, Jana Hybášková, Anna Ibrisagic, Toomas Hendrik Ilves, Ioannis Kasoulides, Bogdan Klich, Helmut Kuhne, Joost Lagendijk, Vytautas Landsbergis, Cecilia Malmström, Pasqualina Napoletano, Annemie Neyts-Uyttebroeck, Raimon Obiols i Germà, Vural Öger, Alojz Peterle, João de Deus Pinheiro, Mirosław Mariusz Piotrowski, Bernd Posselt, Raül Romeva i Rueda, Libor Rouček, José Ignacio Salafranca Sánchez-Neyra, György Schöpflin, Gitte Seeberg, István Szent-Iványi, Antonio Tajani, Charles Tannock, Paavo Väyrynen, Inese Vaidere, Geoffrey Van Orden, Josef Zieleniec |
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Substitute(s) present for the final vote |
Laima Liucija Andrikienė, Irena Belohorská, Alexandra Dobolyi, Lilli Gruber, Tunne Kelam, Csaba Sándor Tabajdi, Marcello Vernola |
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Substitute(s) under Rule 178(2) present for the final vote |
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OPINION of the Committee on Development (4.10.2006)
for the Committee on Budgets
on the draft general budget of the European Union for the financial year 2007
(C6-0299/2006 - 2006/2018(BUD))Section III - Commission
Draftsman: Jürgen Schröder
SUGGESTIONS
The Committee on Development calls on the Committee on Budgets, as the committee responsible, to incorporate the following suggestions in its motion for a resolution:
1. Draws attention to the central role of the Millennium Development Goals (MDGs) in EU development policy, especially the commitment to halve the number of people living in poverty by 2015; deplores, therefore, the proposed cuts from the 2006 level of appropriations for Asia, home to most of the world's poor, and for thematic actions linked to basic social services;
2. Recalls the recommendation of the European Council of 15-16 December 2005 that at least 90% of global external assistance under the 2007-2013 Financial Framework should be eligible for classification as Official Development Assistance under the current definition established by the OECD Development Assistance Committee;
3. Insists that the simplification of the budget structure in Heading 4 for the period 2007-2013 must not result in any loss of transparency or in the European Parliament's having less of a say in the use of development policy resources, and that there must remain at least the same level of visibility of geographic and thematic appropriations as in the 2006 budget; calls specifically for objectives to be met and for the maintenance of separate budget lines and thematic sectors which are key to the MDGs;
4. Welcomes the Commission's acceptance of the benchmarks for development spending of 35% for social infrastructure, agreed with Parliament in 2001, and the internationally agreed 20% for basic social services; calls for continuing inter-institutional dialogue on greater promotion of pro-poor development spending;
5. Calls for special attention to be given to facilitating small and medium-sized enterprises in developing countries, as these are central to economic development and employment and contribute to "aid for trade" initiatives; further calls for a minimum of 10% of "Aid for Trade" to be dedicated to "Aid for Fair Trade";
6. Stresses the need to provide for adequate sums for the 18 ACP countries affected by the reform of the common organisation of the market (COM) in sugar, which at the very least means that there must be no reduction in the sums provided for in the Commission's preliminary draft budget, but above all also that account must be taken of the real needs of the countries concerned as set out in the action plans submitted by them to the Commission in accordance with Regulation (EC) No 266/2006 of the European Parliament and of the Council of 15 February 2006 establishing accompanying measures for Sugar Protocol countries affected by the reform of the EU sugar regime [1];
7. Calls for greater support to be given to management of water, and in particular cooperation between developing countries with shared waters that run across borders, in order to promote economic development and help prevent conflict resulting from disputes over water;
8. Stresses the importance of giving the fullest attention within EU development cooperation to climate change mitigation and adaptation, and underlines the need for investments in sustainable energy - both energy efficiency and renewables - as well as adaptation measures in high-risk regions for weather-related disasters;
9. Emphasises that the protection and the regeneration of life supporting systems, such as healthy soils, forests and marine resources, and the sound management of fresh-water resources, are an indispensable component of poverty reduction; insists, therefore, that a high priority be given to these areas within the budget of the European Union.
PROCEDURE
Title |
Draft general budget of the European Union for the financial year 2007 - Section III - Commission |
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Procedure number |
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Committee responsible |
BUDG |
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Opinion by |
DEVE |
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Enhanced cooperation – date announced in plenary |
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Drafts(wo)man |
Jürgen Schröder |
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Previous drafts(wo)man |
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Discussed in committee |
28.8.2006 |
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Date adopted |
3.10.2006 |
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Result of final vote |
+: –: 0: |
27 |
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Members present for the final vote |
Margrete Auken, Alessandro Battilocchio, Margrietus van den Berg, Danutė Budreikaitė, Marie-Arlette Carlotti, Thierry Cornillet, Nirj Deva, Alexandra Dobolyi, Michael Gahler, Filip Andrzej Kaczmarek, Glenys Kinnock, Maria Martens, Miguel Angel Martínez Martínez, Gay Mitchell, Luisa Morgantini, José Javier Pomés Ruiz, Horst Posdorf, Frithjof Schmidt, Jürgen Schröder, Anna Záborská, Mauro Zani |
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Substitute(s) present for the final vote |
Milan Gaľa, Manolis Mavrommatis, Anne Van Lancker, Ralf Walter, Anders Wijkman, Gabriele Zimmer |
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Substitute(s) under Rule 178(2) present for the final vote |
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Comments (available in one language only) |
... |
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- [1] OJ L 50, 21.2.2006, p. 1.
OPINION of the Committee on International Trade (13.9.2006)
for the Committee on Budgets
on the draft general budget of the European Union for the financial year 2007
(C6-0299/2006 - 2006/2018(BUD))Section III - CommissionDraftsman: Peter Šťastný
SUGGESTIONS
The Committee on International Trade calls on the Committee on Budgets, as the committee responsible, to incorporate the following suggestions in its motion for a resolution:
DG Trade
1. Notes that according to the 2007 PDB (Preliminary Draft Budget) and DB (Draft Budget), DG Trade's operational budget (i.e. line 20 02 01) is set to increase by 29.1% in 2007 in order to finance the following main activities: Additional funding to finance trade adjustment measures in third countries as identified in the Sustainability Impact Assessments (SIA); Contributions to global trade-related assistance initiatives run by multilateral organisations; and new spending initiatives resulting from the 2006 Communication on China;
2. Considers that the Council's Draft Budget cuts in administrative expenditure relating to, among others, staff and management of DG Trade are not justified and that the PDB figures should therefore be reinstated;
3. Notes, for instance, that the actual increase in staff provided for by DG Trade for 2007 amounts to only 12 officials, which is a moderate figure given the challenges which DG Trade must tackle over the coming year;
4. Asks the Commission to provide Parliament with information about the number and nature of the staff actually working on trade issues in the Commission's delegations in third countries, together with an assessment of the capabilities and resources of those delegations to deal with the growing challenges of trade policy, particularly in developing countries and emerging economies;
Trade related Assistance (TRA)
5. Stresses that the EC Budget, in its current form, does not allow for the desirable level of visibility, transparency, and flexibility for the disbursement of trade-related assistance (TRA);
6. Considers that the "Aid for Trade" budget line (20 02 03) should be appropriately funded in order to finance horizontal trade-related assistance initiatives, especially in collaboration with multilateral agencies, that complement and offer a real added value to the EC geographical programmes;
7. Stresses that the pledge by the President of the Commission to increase current and planned EC funding to support the trading capacity of developing countries to EUR 1 000 000 000 per year should be implemented with new funding and without resorting to either the relabelling as TRA of aid formerly classified as infrastructure or the inclusion of the support towards ACP countries affected by the sugar reform;
8. Urges the Commission to submit an annual, detailed report to the competent parliamentary committee on TRA programming and spending so that Parliament is informed about TRA-related disbursements in general and the implementation of the "Barroso pledge" in particular;
Cooperation with industrialised non-member countries
9. Stresses that according to the 2007 PDB and DB (Draft Budget) the cooperation with industrialised non-member countries (i.e. line 19 05 01) is set to increase by 35,8 % in 2007 to reach EUR 22 000 000; notes that, as justified by the Commission, this increase is appropriate given the extension of the geographical coverage of the new instrument (from 6 to fifteen or possibly 17 countries) and the diversification of its activities;
10. Notes that Parliament should be consulted and express its opinion on the new instrument for cooperation with industrialised non-member countries in accordance with the appropriate procedure;
Macrofinancial Assistance
11. Notes that the 2007 Draft Budget (DB) has cut PDB appropriations for macroeconomic assistance (line 01 03 02) by 19.5 % in commitments, from EUR 79 591 000 to EUR 57 201 000, and by 16.71% in payments, from EUR 100 814 000 to EUR 77 694 000 ;
12. Reiterates that Macro-Financial Assistance (MFA) should be subject to strict monitoring and conditionality as the EU does not control how beneficiary countries spend the EU's general un-earmarked funds entering their general budget; regrets that MFA lacks a proper legal basis and continues to be based on ad hoc Council decisions for each operation; underlines, therefore, the need for a co-decided framework regulation on MFA that enhances transparency, accountability, monitoring and reporting systems;
13. Stresses that Parliament should be consulted on MFA proposals in sufficiently good time to allow it to express its views and adopt its opinion according to a normal calendar and procedure; insists therefore that the Council invite Parliament to deliver its opinion on the Commission's MFA-related proposals by way of the "urgency procedure" only when absolutely necessary and after due justification.
PROCEDURE
Title |
Draft general budget of the European Union for the financial year 2007 - Section III - Commission |
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Procedure number |
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Committee responsible |
BUDG |
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Opinion by |
INTA |
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Enhanced cooperation – date announced in plenary |
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Draftsperson |
Peter Šťastný |
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Previous drafts(wo)man |
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Discussed in committee |
11.7.2006 |
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Date adopted |
12.9.2006 |
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Result of final vote |
+: –: 0: |
19 0 0 |
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Members present for the final vote |
Jean-Pierre Audy, Daniel Caspary, Giulietto Chiesa, Christofer Fjellner, Béla Glattfelder, Jacky Henin, Filip Andrzej Kaczmarek, Alain Lipietz, Erika Mann, Helmuth Markov, Georgios Papastamkos, Peter Šťastný, Johan Van Hecke, Daniel Varela Suanzes-Carpegna, Zbigniew Zaleski |
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Substitute(s) present for the final vote |
Margrietus van den Berg, Robert Goebbels, Antolín Sánchez Presedo, Mauro Zani |
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Substitute(s) under Rule 178(2) present for the final vote |
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Comments (available in one language only) |
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OPINION of the Committee on Economic and Monetary Affairs (12.9.2006)
for the Committee on Budgets
on the draft general budget of the European Union for the financial year 2007
(C6-0299/2006 - 2006/2018(BUD))Section III - Commission
Draftsman: Giovanni Pittella
JUSTIFICATION
This draft opinion takes as its reference point the preliminary draft budget (PDB) for the financial year 2007 published by the Commission on 3 May 2006.
1. General remarks
Your draftsman wishes to give a qualified appraisal of the favourable trend of appropriations relating to the Lisbon strategy as reflected in the changes in the chapters of the PDB.
Under the multiannual financial arrangements for 2007-2013, the appropriations in the PDB have been arranged in 7 titles, two of which can be seen to be partly inspired by the logic underpinning the Lisbon strategy. The growth in the funding allocated to them is comparable to an overall budget increase of +4.6%. For example:
- The commitments under the heading of Competitiveness for growth and employment increase by +11.5% to € 8796.1 million and include the expenditure relating to the Competitiveness and Innovation Framework Programme (+53.6%), trans-European networks (+18%) and the seventh framework research programme (+3.4%).
- The commitments under the heading of Cohesion for growth and employment, which correspond to the structural funds, increase for their part by + 14.8 % to € 45,486.6 million.
These appropriations are divided up between a number of fields of activity, viz. economic and financial affairs, enterprise, environment, information society, energy and transport, most of which do not come under the direct responsibility of ECON but do contribute to implementation of the Lisbon strategy.
This overall favourable trend of commitments must of course be reflected in the headings with a direct bearing on the European economy. While the relative growth of appropriations is moving in the right direction, their growth in absolute terms for the headings making an effective contribution to the expenditure relating to competitiveness, support for SMEs and aid for innovation remains nevertheless modest on account of the initial amounts involved.
2. Administrative expenditure for the policy area 'Economic and financial affairs' (budget heading 01 01 01)
Your draftsman notes with satisfaction an increase of 8.1% over 2005 in the appropriations allocated to expenditure on staff in active employment. He believes that it is essential that the Commission departments have adequate resources available to discharge the tasks entrusted to them in this area and that the proposed increase is satisfactory.
3. Coordination and surveillance of Economic and Monetary Union (budget heading 01 02 02)
Your draftsman welcomes the 4.9% increase in this budget heading proposed by the Commission since it is essential that political decision-makers and public opinion have analyses available that are of good quality in order to be able to monitor effectively developments in the European economy.
4. Prince - Communication on Economic and Monetary Union, including the euro (budget heading 01 02 04)
Your draftsman welcomes the substantial increase of 40% earmarked for the PRINCE programme. Information campaigns about EMU and the euro are a vital instrument for the eurozone. Opinion polls have indeed revealed declining support for the euro, which is doubtless partly attributable to insufficient information being given to the public about the benefits of EMU and the real impact of the introduction of the euro on prices. New campaigns are necessary in the new Member States, particularly those at an advanced stage of preparation for their entry into the eurozone.
5. Competitiveness and Innovation Framework Programme
(budget heading 01 04 04)
The purpose of this heading is support for small businesses and innovation by assisting access to sources of funding. The Competitiveness and Innovation Programme seeks to incorporate in an overall plan the various programmes in support of productivity, innovation and lasting growth. All efforts to facilitate the access of SMEs experiencing difficulties to reasonable financing need to be encouraged. Nevertheless, the bulk of these programmes does not allow easy identification of the objectives being pursued.
Your draftsman welcomes the 55.3% increase in commitment appropriations. Nevertheless, in absolute terms, the sums allocated to this support remain modest: € 142.1 million in commitment appropriations and only € 117 million in payment appropriations (+30%).
6. European Investment Fund (budget heading 01 04 09)
Participation in increasing the capital of the EIF is welcome as a way of encouraging risk capital.
7. Representation of the EU on the IASB
The need to improve the procedure for drawing up and adopting the accounting standards produced by the IASB to which the EU has de facto delegated its responsibility for accounting standards requires the establishment of a system of funding capable of contributing to better governance of this body. In the light of the various funding schemes likely to be implemented, it is appropriate that the Commission should be in a position, where necessary, to provide direct funding. Furthermore, the Commission's resources in terms of quality staffing need to be adjusted to cope with the major issues represented by accounting standards for businesses and the European economy.
8. Administrative expenditure for the policy area 'Competition policy' (budget heading 03 01 01)
The 7.5 % increase over 2006 in the appropriations set aside for expenditure on staff in active employment in the area of competition policy seems to be in line with the necessary increase in human resources to discharge the tasks entrusted in this area.
9. Fiscalis 2007 programme (budget heading 14 05 31)
The Fiscalis programme, which seeks to improve the operation of taxation systems in the internal market, has proved very effective. It is clearly important therefore to allocate all the funds necessary to this programme which has demonstrated its effectiveness in the past. An increase in appropriations higher than the + 2.3% set aside in the PDB seems necessary.
SUGGESTIONS
The Committee on Economic and Monetary Affairs calls on the Committee on Budgets, as the committee responsible, to incorporate the following suggestions in its motion for a resolution:
1. Reiterates the Parliament's recurrent position in favour of measures forming part of the Lisbon strategy, in particular, support for SMEs and innovation, active labour market policies, measures to promote equal opportunities and lifelong learning policies; welcomes the efforts in this area but notes that the increase in the amounts concerned, which is considerable in relative terms remains limited in absolute terms;
2. Approves the alignment of various programmes under the Competitiveness and Innovation Framework Programme; nevertheless, calls for the various programmes for the benefit of SMEs to be properly coordinated and for the SMEs at which they are aimed to be properly informed about them so that the programmes provide effective aid to the target beneficiaries; also asks for the consolidation of overlapping programmes;
3. Asks that funding be set aside so that the Commission is in a position, where appropriate, to make a direct financial contribution to the International Accounting Standards Board in order to contribute to improved governance of this body in the interests of the EU;
4. Reiterates its support for the Fiscalis 2007 programme aimed at improving the operation of taxation systems in the EU and at training national officials in the areas of both indirect and direct taxation; asks for the creation of a single European database of national legislative tax arrangements, practices in force and e-learning tools, to raise business awareness and facilitate cross-border activity; requests, accordingly, a higher increase in the appropriations earmarked for Fiscalis 2007 than that proposed in the Preliminary Draft Budget.
5. Suggests that the efficiency of the Commission's operations and decisions be improved by the adoption of a cross-sectoral approach in its management; requests that the Commission's administrative expenditure be reduced.
PROCEDURE
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Draft general budget of the European Union for the financial year 2007 - Section III - Commission |
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Procedu |